NEW YORK (CNN/Money) - A panel has rejected a third request for federal loan guarantees from bankrupt United Airlines, saying Monday it will not entertain any more requests for help from the nation's troubled No. 2 airline.

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United, a unit of UAL Corp. (UALAQ: Research, Estimates), had cut back its request for a loan guarantee to $1.1 billion, but the Air Transportation Stabilization Board, which earlier this month rejected a request for $1.6 billion in guarantees, said its three members had unanimously decided to reject the request.

"(The) board concluded that granting the loan guarantee is not a necessary part of maintaining a safe, efficient, and viable commercial aviation system in the United States," said the letter sent to UAL. "Moreover, the Board believes that airline credit markets have been improving since late 2001 and 2002, ... increasing the likelihood of United succeeding without a loan guarantee."

United had argued it needed the loan guarantee to arrange financing needed to emerge from bankruptcy. The carrier said Monday it would now attempt to do that without government help.

"While we disagree with their decision, we are gratified by the ATSB's public recognition of our progress and are already moving forward to secure the exit financing we need to take United out of bankruptcy," said a statement issued by the airline. "The message from the ATSB is that we can get the exit financing we need on our own."

"We are now holding discussions with our lenders and others to determine what an appropriate overall capital structure might be," the statement continued. "The discussions we are having will enable us to fill that out, so we can continue moving forward toward our exit from Chapter 11."

Standard & Poor's airline credit analyst Phil Baggaley said the decision probably means that UAL, which filed for bankruptcy in December 2002 after the first rejection of a loan guarantee request from the ATSB, isn't likely to emerge from bankruptcy until 2005 at the earliest. The company had planned to emerge from bankruptcy this year.

"They will have to go back and negotiate with labor, with their creditors, and with the unsecured creditors. If they attract new equity investors, it will have to change (the) allocation of ownership each will have," he said.

Baggaley said that it is only likely, not certain, that the airline will be able to avoid liquidation.

"I think United's chances of raising equity and credit will depend largely on external events outside their control," he said. "If there are no major terrorist attacks that affect aviation, or if fuel doesn't stay extremely high, they probably will be able to pull together exit financing. But there are risks from those external factors. I think the clock is ticking."

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But Baggaley and Ray Neidl, airline analyst for Blaylock & Partners, said they believe that United still can be a financially viable airline despite the fact that its losses started in 2000, a full year before the Sept. 11 terrorist attack. But further cost cuts will be necessary to drum up the needed investor interest, they said.

"There's a powerful franchise there," said Neidl. "If they can get the right cost structure, the model does not have to be tweaked too much. Hopefully they won't have to sell assets. If you start having to sell strategic assets, you have a slow liquidation the way Pan Am did."

United's underfunded pension plans is a serious problem for attracting financing and equity it needs. It could be forced to reduce pension benefits, something that was left relatively untouched by the earlier rounds of labor concessions.

It could even be forced to terminate its pension plans altogether, said Neidl.

United said its pension obligations total about $4.1 billion over the next five years, and that its pension funds are underfunded by about $6 billion. Airline spokewoman Jean Medina said it would be premature to discuss what kinds of concessions might be sought from employees, since discussions with lenders and investors are in an early stage.

United is one of a number of major airlines that operate an extensive and expensive network of hubs designed to give business travelers access to convenient travel between a large number of cities with the greatest possible frequency.

But as the economy started to slow in 2001, business travelers -- who traditionally pay a premium over leisure fliers -- started cutting back on travel, leaving United and the other so-called network carriers in the red.

At the same time lower-cost, low fare airlines such as Southwest Airlines (LUV: Research, Estimates) and JetBlue (JBLU: Research, Estimates) started putting more and more pressure on the network carriers to keep their fares low. United now faces low-cost competition in most of the cities where it has a major hub.

In addition fuel costs have been far higher than originally forecast for much of this year. And while United has been able to win labor concessions from its unions since it filed for bankruptcy, the road to winning those concessions has been difficult.

It might have been forced to filed for bankruptcy even without the ATSB's initial loan guarantee rejection after rank-and-file of one of its unions rejected a concession contract negotiated by its leadership. The state of labor relations at the airline will be an issue going forward, said Neidl.

"Investors and lenders will want assurances that all the employees will work together to try to save the company," he said. "They can't have the employees at war with management in a service industry."

United had lobbied hard to win the loan guarantees. House Speaker Dennis Hastert, whose Illinois district is near United's headquarters, called Treasury Secretary John Snow to push for approval of the loan guarantee. Snow has one of the three represetatives on the ATSB, along with Transportation Secretary Norman Mineta and the Federal Reserve.

Snow denied Friday that politics had played any role in his representative's vote on the United loan guarantee application.

United last week reported that it had an operating profit in May, although it still posted a net loss for the month. It also said that bookings for the summer are very strong.

United has about 65,000 employees, and more than 1,800 flights a day to 109 destinations in 23 countries.