UNITED AIRLINES has hailed as a success its first year of operations as an employee-owned company. The carrier attributes its return to profitability and improved operating performance to the deal struck in July 1994, when United employees traded $4.9 billion in wage and work-rule concessions for a 55% stake in the airline.
United says that it has posted "its first back-to-back profitable quarters in five years" since the buy-out, improved on-time performance, reduced passenger complaints, and successfully launched its low-cost Shuttle operation on the US West Coast. Unit costs have been reduced by 2.5% - to the lowest among the "Big Three" US airlines, the carrier claims - and operating margin has increased, from 2.6% to 7.1%.
Analysts were concerned that the employee-owned airline would embark on an aircraft-buying spree. Instead, United says, the carrier has adopted a policy of only acquiring aircraft to replace those reaching 20 years old, to avoid incurring heavy overhaul expenses. The share price has climbed by 67%, to $147, in the year since the buy-out, the airline notes.
Source: Flight International
