Cosmo,
Below is the reprint of Tilton's Op-Ed piece in Today's Chicago Tribune.
Sumsonic, I echo your remarks. The more I hear from Tilton, the more I'm convinced he's the type of leader to turn UA around. I also think Pete's promotion is great for United. He is well-respected throughout the company.
A Tribune editorial on Wednesday said it was time to force change at United. What it overlooked, however, were the major strides that United has already made -- and the changes it continues to make -- in reforming its operations. I can assure you that nobody understands and embraces the need for change more completely than the management and employees of this airline.
Last week, United reached an unprecedented and far-reaching agreement with its unions to reduce operating expenses. The Tribune failed to note, however, that financial changes have been underway at United for many months. We have made significant progress in bringing costs in line with revenues, while maintaining our high standards for reliability, safety and service, by taking a number of critical steps, including:
* Deferring delivery of 45 aircraft, saving approximately 2 billion dollars;
* Cutting our schedule and capacity by 23 percent since the tragic events of Sept. 11, 2001;
* Furloughing 20,000 employees;
* Retiring 99 Boeing 727 and 737-200 aircraft, resulting in reduced maintenance and training costs;
* Achieving 500 million dollars in savings by reducing sales costs, automating refunds, reducing discretionary spending, eliminating base commissions for travel agents and winning concessions from our vendors;
* Moving to 100 percent electronic ticketing;
* Entering into a code-sharing partnership with US Airways that we expect will generate more than 200 million dollars a year; and
* Completely restructuring our schedule to increase flights to more profitable markets, including the significant actions taken on Monday and Wednesday of this week.
But while we have already done a lot to make United stronger, we recognize that these changes are not enough, given the state of the industry and the issues facing our company in this post-9/11 environment. Since Labor Day, we have seen unprecedented cooperation between
United and its unions -- and among the unions themselves to -- find major new savings. And, last week, we reached a groundbreaking agreement on a framework for an additional 5.8 billion dollars in labor cost reductions.
As already noted, this week United presented the Air Transportation Stabilization Board, the agency that oversees federal loan guarantees, with an updated business plan that includes not just the breakthrough savings on labor costs but as much as 1.8 billion dollars in non-labor profit improvements and other cost savings as well. This proposal demonstrates more forcefully than ever that everyone at United shares a sincere commitment to resolving the problems confronting the company. The agreement also helps ensure that United will have the resources available to repay any emergency loans, one of the ATSB's main criteria for approving its guarantees.
We believe it is in the best interests of all concerned to resolve the issues facing United outside of the bankruptcy process. Your editorial suggests that bankruptcy court is a panacea to the major financial challenges facing the company -- a notion that is pure folly.
A Chapter 11 filing for United Airlines would be painful for the citizens of Chicago, for Chicago's business community and for the employees of our company. I find it disheartening, to say the least, that the Chicago Tribune thinks it is an acceptable outcome for an enterprise so important to our region - and, frankly, to the world. We may ultimately need to pursue this option, but rest assured -- it will be our last resort.
Today, the competitive spirit of United's employees is focused on a much better solution --restoring the profitability of a great airline that consistently sets new standards for on-time performance and customer satisfaction.