United States probing airline takeover bid

Friday, Dec. 19, 2003 | 9:26 a.m.

CHICAGO -- As United Airlines went back to a federal loan board for a second time on Thursday, seeking approval for $1.6 billion in loan guarantees, the Justice Department opened an antitrust investigation into United's role in encouraging a hostile takeover bid for a regional carrier it uses on the East Coast.

The investigation, disclosed late on Thursday, cast a cloud over United's application for the federal aid. The Air Transportation Stabilization Board's decision last year to reject United's first request for assistance forced the airline to file for bankruptcy protection.

United officials expressed confidence on Thursday that their second bid for loan guarantees would be approved, based on a business plan that was much more conservative than the rosy forecast they presented to the government last year.

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