UAL CEO: US skies need deregulation
Says new ownership rules would allow US airlines to better compete against European, Asian rivals.
September 22, 2005
LOS ANGELES (Reuters) - On Wednesday United Airlines Chief Executive Glenn Tilton called for the completion of U.S. airline deregulation, saying that without it American carriers risked being marginalized by Europe and Asia.
Tilton, addressing a business luncheon in Los Angeles, said that United, the bankrupt No. 2 U.S. carrier, would emerge from Chapter 11 next year in a much stronger position to seize growth opportunities in the future.
But no matter how well United or any of the other major U.S. carriers currently in bankruptcy proceedings transform their business, they would be hampered as global competitors without a change in the regulatory environment, he said.
"Since deregulation in 1978, U.S. government policy has encouraged the maximum number of domestic carriers and discouraged meaningful consolidation," he said.
Despite billions of dollars in financial aid granted by the U.S. government after the September 11, 2001, attacks, four of the seven major U.S. carriers are now in bankruptcy proceedings.
Tilton noted that carriers in Europe, such as Air France and KLM , and Asia had returned to profit and were consolidating across national boundaries to create "super-carriers."
"For the first time in the history of aviation, U.S. carriers are no longer the largest, strongest carriers in the world," he said.
"Without a coherent U.S. aviation policy that reverses the bias against airline size and removes the barriers that prevent us from constructive consolidation, U.S. carriers will be unable to compete on a global scale, and we risk being marginalized," Tilton said.
Asked how many major U.S. carriers would be flying in five years if the deregulation process was complete, Tilton replied, "Three." He did not elaborate.
UAL Corp., parent of bankrupt United Airlines, said Wednesday its August net loss was $30 million, with $82 million in expenses related to its reorganization.
Tilton noted that excluding expenses, United earned a "respectable" operating profit of $80 million in August despite a 43 percent increase in the cost of fuel over August 2004.
United received court approval last week for its schedule to exit Chapter 11 next year. United has said it aims to leave bankruptcy by February 1.
Says new ownership rules would allow US airlines to better compete against European, Asian rivals.
September 22, 2005
LOS ANGELES (Reuters) - On Wednesday United Airlines Chief Executive Glenn Tilton called for the completion of U.S. airline deregulation, saying that without it American carriers risked being marginalized by Europe and Asia.
Tilton, addressing a business luncheon in Los Angeles, said that United, the bankrupt No. 2 U.S. carrier, would emerge from Chapter 11 next year in a much stronger position to seize growth opportunities in the future.
But no matter how well United or any of the other major U.S. carriers currently in bankruptcy proceedings transform their business, they would be hampered as global competitors without a change in the regulatory environment, he said.
"Since deregulation in 1978, U.S. government policy has encouraged the maximum number of domestic carriers and discouraged meaningful consolidation," he said.
Despite billions of dollars in financial aid granted by the U.S. government after the September 11, 2001, attacks, four of the seven major U.S. carriers are now in bankruptcy proceedings.
Tilton noted that carriers in Europe, such as Air France and KLM , and Asia had returned to profit and were consolidating across national boundaries to create "super-carriers."
"For the first time in the history of aviation, U.S. carriers are no longer the largest, strongest carriers in the world," he said.
"Without a coherent U.S. aviation policy that reverses the bias against airline size and removes the barriers that prevent us from constructive consolidation, U.S. carriers will be unable to compete on a global scale, and we risk being marginalized," Tilton said.
Asked how many major U.S. carriers would be flying in five years if the deregulation process was complete, Tilton replied, "Three." He did not elaborate.
UAL Corp., parent of bankrupt United Airlines, said Wednesday its August net loss was $30 million, with $82 million in expenses related to its reorganization.
Tilton noted that excluding expenses, United earned a "respectable" operating profit of $80 million in August despite a 43 percent increase in the cost of fuel over August 2004.
United received court approval last week for its schedule to exit Chapter 11 next year. United has said it aims to leave bankruptcy by February 1.