United Airlines spent its first days in bankruptcy lining up public and political support as its chief executive Glenn Tilton flew to major United airports to boost employee morale.
Tilton said he was hopeful that the carrier could emerge from reorganisation in 18 months. The Speaker of the House, Chicago-area Republican Denny Hastert, has lent his support to United's plans to seek again the $1.8 billion federal loan guarantee that was rejected days before it sought bankruptcy. It will try to gain the Air Transportation Stabilization Board funding to support its exit from reorganisation, while the $1.5 billion in debtor-in-possession financing it lined up in the days before its filing will be used to operate as it tries to cut costs.
As the airline began negotiations with its unions over deeper cuts, Tilton said it would revive Shuttle by United, which was suspended after the 11 September attacks. The new service, he said, would operate much like Southwest Airlines, with point-to-point service, low costs, low fares and quick turnarounds. It would use Boeing 737s and Airbus A320s.
United is negotiating with union leaders to have the unit running next year under a new name. The airline has also stepped up talks with its feeder carriers over taking over some routes as a way to lower costs. Tilton said he is talking to union leaders about pay cuts as part of a plan to cut $3.3 billion in costs out over the next five and a half years. He hopes it will be an "equitable and fair process in deciding who can make what level of contributions to a more competitive cost structure as we go forward."
To assist in its planning, United brought back Doug Hacker to the newly created position of executive vice-president of strategy. Hacker had become head of the group's loyalty subsidiary after leading the airline itself earlier this year.
Shares in parent UAL actually rose after the filing, partly due to reports that investment group Texas Pacific Group among others is contemplating taking a stake in UAL Corp. Texas Pacific, which has been involved in the Continental and America West airlines bankruptcies, is one of the potential buyers identified by Tilton. Reports that former UAL chief executive Gerald Greenwald was contemplating leading an investment group bid for his old company have yet to be confirmed.
DAVID FIELD WASHINGTON
Source: Airline Business
