CHICAGO,
June 4 /PRNewswire-FirstCall/ -- United Airlines today announced
significant fleet, capacity and personnel changes, enabling the company to
build a stronger, more competitive business better able to withstand record
oil prices and a softening economy.
United will remove a total of 100 aircraft from its mainline fleet,
including the 30 previously announced Boeing 737s, and reduce its mainline
domestic capacity in the fourth quarter 2008 by 14 percent year over year. The
company expects to retire all of its 94 B737s, provided it can work out terms
with certain lessors, and six Boeing 747s. Over the 2008 and 2009 period,
cumulative mainline domestic capacity will be reduced between 17 percent and
18 percent and cumulative consolidated capacity between 9 percent and 10
percent.
Capacity Fourth Quarter Full-year Full-year
(Available Seat Miles) 2008 2008 2009
(Versus FY 2007)
North America -14.5% to -13.5% -8.0% to -7.0% -18.0% to -17.0%
International -4.5% to -3.5% +1.5% to +2.5% -5.0% to -4.0%
Mainline -10.5% to -9.5% -4.0% to -3.0% -12.5% to -11.5%
Express +3.0% to +4.0% Flat to +1.0% +10.0% to +11.0%
Consolidated Domestic -11.5% to -10.5% -6.5% to -5.5% -13.5% to -12.5%
Consolidated -9.0% to -8.0% -3.5% to -2.5% -10.0% to -9.0%
"Today we are taking additional, aggressive steps that demonstrate our
commitment to size our business appropriately to reflect the current market
reality, leverage capacity discipline to pass commodity costs on to customers,
develop new revenue streams and continue to reduce non-fuel costs and capital
expenditures," said Glenn Tilton, United's chairman, president and CEO. "This
environment demands that we and the industry act decisively and responsibly.
At United, we continue to do the right work to reduce costs and increase
revenue to respond to record fuel costs and the challenging economic
environment."
With fuel at current prices, it creates more than a $3 billion challenge
to overcome. United believes that these actions will offset that challenge by
2009, assuming the industry as a whole takes similar actions.
When complete, the fleet reduction is expected to retire United's oldest
and least fuel-efficient jets, and will lower the company's average fleet age
to 11.8 years. The majority of schedule changes related to the elimination of
30 B737s previously announced are currently reflected in reservation systems.
Further changes related to the retirement of an additional 50 aircraft by year
end will be reflected in these systems in the near future. Schedule changes
will be principally accommodated through modest reductions of underperforming
markets and through frequency reductions while retaining a commitment to all
five U.S. hubs. About 80 planes are expected to be out of the system by the
end of 2008, with the other 20 coming out by the end of 2009. The fleet
reduction also includes six Boeing 747s. As part of these changes, United is
eliminating its Ted product, reconfiguring that fleet's 56 A320s to include
United First class seats. The reconfiguration of the Ted aircraft will begin
in spring 2009 and be completed by year-end 2009.
"The decision to dramatically reduce our capacity profile, particularly in
the domestic marketplace, while over time eliminating a fleet type, is a
significant step leading to a more effective and efficient operating fleet for
United in the years ahead, while improving our customer experience and
reliability," said John Tague, executive vice president and chief operating
officer.
As United reduces the size of its operation, it is further reducing staff.
United expects to reduce the number of salaried and management employees and
contractors by 1,400-1,600, including the previously announced 500 employee
reduction by year-end, and the company will determine the number of front-line
employee furloughs as it finalizes the schedule over the next month.
The company named Joe Kolshak senior vice president of operations,
overseeing United Services, Flight Operations and Operations Control. Kolshak
previously served as Delta's executive vice president of operations,
responsible for Delta's maintenance, flight operations, ground operations,
operations control, safety and security as well as the Delta Express
operations. He will be based in San Francisco, and will report to Tague.
"Joe brings a depth and breadth of experience to United that will enable
us to accelerate our work to improve customer service and operational
performance moving us toward a goal to be the industry leader in the U.S.,"
Tague said. "We are committed to building a leadership team with the
capability and accountability to drive performance improvements across our
company and realize the full potential of United Airlines."
Alexandria Marren was also promoted to senior vice president - Onboard
Service, and will also oversee flight attendant scheduling. She previously
served as vice president - Onboard Service. Marren will report to Tague.
William Yantiss, vice president - Corporate Safety, Security and Environment,
also will report to Tague.
Cindy Szadokierski, who has been responsible for Operations Control, will
now be vice president of United Express and Airport Operations Planning,
reporting to Scott Dolan, senior vice president - Airport Operations, Cargo
and United Express. As a result of the reorganization, the company also
announced that Bill Norman, senior vice president - United Services, and Sean
Donohue, senior vice president - Flight Operations and Onboard Service, will
be leaving United.
"We thank Bill and Sean for their many contributions during their long and
successful careers with United, and wish them well in their future endeavors,"
Tague said.
About United
United Airlines (Nasdaq: UAUA) operates more than 3,200* flights a day on
United, United Express and Ted to more than 200 U.S. domestic and
international destinations from its hubs in Los Angeles, San Francisco,
Denver, Chicago and Washington, D.C. With key global air rights in the Asia-
Pacific region, Europe and Latin America, United is one of the largest
international carriers based in the United States. United also is a founding
member of Star Alliance, which provides connections for our customers to 965
destinations in 162 countries worldwide. United's 55,000 employees reside in
every U.S. state and in many countries around the world. News releases and
other information about United can be found at the company's Web site at
united.com.
*Based on United's flight schedule between Jan. 1, 2008 and Dec. 31, 2008.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: Certain statements included in this press release are forward-
looking and thus reflect the company's current expectations and beliefs with
respect to certain current and future events and financial performance. Such
forward-looking statements are and will be subject to many risks and
uncertainties relating to the operations and business environment of the
company that may cause actual results to differ materially from any future
results expressed or implied in such forward-looking statements. Factors that
could significantly affect net earnings, revenues, expenses, costs, load
factor and capacity include, without limitation, the following: the company's
ability to comply with the terms of its credit facility; the costs and
availability of financing; the company's ability to execute its business plan;
the company's ability to realize benefits from its resource optimization
efforts and cost reduction initiatives; the company's ability to attract,
motivate and/or retain key employees; the company's ability to attract and
retain customers; demand for transportation in the markets in which the
company operates; general economic conditions (including interest rates,
foreign currency exchange rates, crude oil prices and energy refining capacity
in relevant markets); the effects of any hostilities or act of war or any
terrorist attack; the ability of other air carriers with whom the company has
alliances or partnerships to provide the services contemplated by the
respective arrangements with such carriers; the costs and availability of
aircraft insurance; the costs of jet fuel; our ability to cost-effectively
hedge against increases in the price of jet fuel; the costs associated with
security measures and practices; labor costs; industry consolidation;
competitive pressures on pricing and on demand; capacity decisions of United
and/or its competitors; U.S. or foreign governmental legislation, regulation
and other actions, including the effect of open skies agreements; the
company's ability to utilize its net operating losses; the ability of the
company to maintain satisfactory labor relations and our ability to avoid any
disruptions to operations due to any potential actions by our labor groups;
weather conditions; and other risks and uncertainties set forth from time to
time in UAL's reports to the United States Securities and Exchange Commission.
Consequently, the forward-looking statements should not be regarded as
representations or warranties by the company that such matters will be
realized. The company disclaims any intent or obligation to update or revise
any of the forward-looking statements, whether in response to new information,
unforeseen events, changed circumstances or otherwise.
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