Report: Vegas airline loan guarantee likely to be rejected

Friday, June 7, 2002 | 11:13 a.m.

Las Vegas-based National Airlines' $60 million loan guarantee application is likely to be rejected by a federal board, a news agency reported today.

TheDeal.com financial news Internet site reported today that National is expected to be the third airline in two weeks to have a loan guarantee application rejected by the Air Transportation Stabilization Board. An ATSB representative could not be reached for comment on the report or on how soon a decision would be reached.

The Internet report cited unidentified sources saying National's chances for approval are hindered by the company operating under bankruptcy protection when it made its application. It noted two other airlines were rejected because the board didn't think the companies could pay back their loans. Vanguard Airlines, Kansas City, Mo., and Frontier Flying Service Inc., Fairbanks, Alaska, had their applications rejected by the board last week.

National officials have said they are confident their application would be approved and that even if it isn't, the firm has a contingency plan.