UAL Corp.'s United Airlines (search) on Friday was granted another month to reorganize itself without interference from creditors as it pursues a federal loan guarantee to secure $2 billion in exit financing.

United Airlines was given "exclusivity" until July 30 to organize its own emergence from bankruptcy, U.S. Bankruptcy Judge Eugene Wedoff said in court in Chicago.

The ruling comes a day after a crushing decision by the Air Transportation Stabilization Board (search) to reject United's bid for a federal loan guarantee for a second time, though two members of the three-member panel said they might reconsider the matter and the third reserved his decision.

Shares of UAL were down 13.5 cents at $1.34, after falling 29 percent earlier in the New York Stock Exchange (search) session.

United, the No. 2 U.S. airline, shortened its request for an extension to one month from three months, saying it expected to conclude within a few days its negotiations for a federal loan guarantee. Judge Wedoff commented that he was only planning to offer the one-month extension anyway.

The company said it sent a letter to the panel on Friday accepting the invitation to reapply.

"We intend to take them up on that offer and we don't think that the process will last very long -- days, not weeks," Jake Brace, the airline's chief financial officer, said following the bankruptcy court hearing.

Brace reiterated the company's view that the stabilization board, when it rejected United's application, was not fully aware of the company's willingness to produce "enhancements" to its proposal.

Asked about the panel's assessment that the airline's cost-cutting moves and improved access to capital markets might allow it to survive without the loan guarantee, Brace demurred.

"We don't think we have access to $2 billion of exit financing, absent the ATSB (loan guarantee) at this time," he said. "We are focused on going through the ATSB process and when we're through with that we'll talk about what happens next."

Brace would not give details about what specific changes or cost cuts the airline would make in its proposal, beyond the roughly $5 billion in cuts the airline has made since filing for Chapter 11 bankruptcy in December 2002.

"We're going to keep those discussions between us and the ATSB private," he said. He has previously suggested the company could emerge from bankruptcy without the guarantee.

"We expect the carrier to have to move very quickly to cut costs further, probably attacking the extremely contentious issue of employee pensions, while probably reducing capacity and perhaps exploring asset sales for which the market is not strong," Credit Suisse First Boston analyst James Higgins wrote in a research note.

The stabilization board, which was created after September 2001 hijack attacks to help struggling airlines, has been stingy and first rejected United in 2002 for a $1.8 billion loan guarantee.

Trouble at US Airways (UAIR), which received a $900 million loan guarantee, has prompted some analysts to question whether the board would grant United's request.

United and other big legacy airlines continue to struggle despite surging passenger volume this summer. They have been especially hurt by record high fuel prices and stiff competition from discount rivals.