United Gets $500 Million Loan for 12 Months

United’s inability to obtain a loan guarantee from the Air Transportation Stabilization Board will force more restructuring, cost reductions and, under a renegotiated loan agreement, suspension of pension contributions until the carrier can exit Chapter 11 bankruptcy.

The airline will seek approval from the bankruptcy court for its amended financing at a hearing scheduled for August 20th.

In July, United said it was deferring $72.4 million in quarterly pension contributions. That action was later stopped by the U.S. Pension Benefit Guaranty Corp. which said suspending the pension payments would violate federal law.