Airlines continue to struggle in the face of a slumping economy and a reduction in business travel.

United Airlines, which filed for Chapter 11 bankruptcy protection on Monday, is the latest victim.

It is hoped that United can fight its way back under bankruptcy protection, but if it doesn’t it will merely be the latest in a long line of carriers – including Eastern and Pan Am – that have folded in the face of aggressive competition from low-cost carriers.

On pace to lose an industry-record $2.5 billion this year, United had pinned its last hopes of avoiding bankruptcy on getting federal backing for $1.8 billion of a $2 billion loan that banks wouldn’t otherwise provide. But the Air Transportation Stabilization Board, created last year to help the airline industry recover after Sept. 11, rejected United’s request on Wednesday.

The linchpin to United’s proposal was $5.2 billion in labor cutbacks by 2008, but the three-member federal panel said the airline’s business plan was financially unsound and a loan guarantee would have risked U.S. taxpayers picking up the tab.

The board made the right choice. The world did not dramatically change when Eastern and Pan Am went under. Nor will it when United is but a memory.

The market should make the choice of which carriers will thrive and which will fail – the ones that thrive are those that are far-sighted, efficient, and in-sync with the desires of the consumers. In United case, our free market system worked exactly as it is supposed to.