Washington ? United Airlines lost its bid for $1.8 billion in federal loan guarantees Wednesday, a major setback to the nation’s second-largest air carrier in its efforts to avoid bankruptcy.

The Air Transportation Stabilization Board said that despite efforts to pare costs, “the business plan submitted by the company is not financially sound.”

Chicago-based United had asked that the government guarantee $1.8 billion of a $2 billion private loan package. Without the guarantee and the loan, the airline said it would probably have to file for Chapter 11 bankruptcy protection.

The $1.8 billion is the largest request received by the board, double the amount that US Airways was conditionally granted earlier this year.

The board was established by Congress last year to oversee a $10 billion loan program, part of an airline industry bailout after the terrorist attacks.

The board, in its statement, said United’s plan “does not support the conclusion that there is a reasonable assurance of repayment and would pose an unacceptably high risk to U.S. taxpayers.”

Two of the three board members ” Treasury’s undersecretary for domestic finance, Peter Fisher, and Federal Reserve Board member Edward Gramlich ” rejected United’s request. The third member, Kirk Van Tine, the general counsel of the Transportation Department, voted to defer a decision until Monday to allow United to submit additional financial information.

A bankruptcy would be unlikely to have any immediate effect on passengers. United has said it would continue flying its normal schedule.

But United is trying to avoid a filing because its stock shares would probably become virtually worthless and it would lose control of its restructuring to a judge.