1. Dallas Morning News, March 2, 2003
2. Rocky Mountain News, January 25, 2003
3. Courier Post, September 8, 2002
4. Forbes, April 2002
5. Daily Herald, February 2, 2002
6. CNN, October 28, 2001
7. Washington Post, October 26, 2001
8. Daily Herald, October 18, 2001
9. Dow Jones, October 17, 2001
10. Wall Street Journal, July 1, 2001
11. Wall Street Journal, April 3, 2001
12. The Staits Times, February 23, 2001
13. AIRwise News, December 2, 2000
14. Rocky Mountain News, December 1, 2000
15. Rocky Mountain News, September 17, 2000
16. USA Today, September 10, 2000
17. Air Transport World, September 2000
18. Wall Street Journal, August 18, 2000
19. Daily Breeze.com, August 16, 2000
20. Aviation Week, August 14, 2000
21. CNN, August 11, 2000
22. Chicago Tribune, August 10, 2000
23. CNN, August 8, 2000
24. San Francisco Chronicle, August 8, 2000
25. NBC News, July 23, 2000
26. Rocky Mountain News, July 14, 2000
27. Wall Street Journal, May 12, 2000
28. Continental Press Release, April 24, 2000
29. Business Week, April 10, 2000
30. WBBM-TV (CBS) News, March 1, 2000
31. Chicago Free Press, February 14, 2000
32. NBC News, February 14, 2000
33. ABC News.com, December 18, 1999
34. Associated Press, October 22, 1999
35. Bloomberg, October 22, 1999
36. Chicago Tribune, August 17, 1999
37. CNET News, June 4, 1999
38. Wall Street Journal, April 19, 1999
39. USA Today, April 19, 1999
40. Wall Street Journal, March 19, 1999
41. Business Week, April 10, 2000
42. WBBM-TV (CBS) News, March 1, 2000
43. Chicago Free Press, February 14, 2000
44. NBC News, February 14, 2000
45. ABC News.com, December 18, 1999
46. Associated Press, October 22, 1999
47. Bloomberg, October 22, 1999
48. Chicago Tribune, August 17, 1999
49. CNET News, June 4, 1999
50. Wall Street Journal, April 19, 1999
51. USA Today, April 19, 1999
52. Wall Street Journal, March 19, 1999

Dallas Morning News
Mechanics told to cut corners on war plane Pentagon: U.S. attorney in S.C. is investigating
March 2, 2003

By Jim Morris

WASHINGTON-United Airlines mechanics under contract with the Air Force were ordered by their managers to falsify paperwork and cut corners while working on the C-17 Globemaster, a troop and cargo carrier that would see extensive duty in a war with Iraq, two recent lawsuits claim.

The allegations, made by current and former United mechanics at South Carolina's Charleston Air Force Base, are being investigated by the U.S. attorney in Columbia, said Maj. Stephanie Holcombe, an Air Force spokeswoman at the Pentagon.

The mechanics say they were told to sign off on engine work they didn't do, make improper repairs and conceal problems.

"We would be required to put a bolt on and sign a federal document saying we'd torqued it a certain amount when we didn't even have the torque wrench," said one of the plaintiffs, Doug Niven, who was fired by United in May 2001 after 13 years with the company.

"There were numerous engines that would have leaks through the fuel oil heat exchangers. We were told to drain those heat exchangers so the Air Force would be unaware the engines were leaking."

United, in a prepared statement, said it does not comment on specific allegations in lawsuits but added that it "thoroughly reviews all allegations of improper conduct and takes necessary action, as appropriate."

The Air Force's Air Mobility Command has 89 C-17s, said a spokeswoman, Maj. Kathryn Barnsley. Barnsley said the Air Force has no reason to believe the C-17 is unsafe.

Scott Schools, a prosecutor in the U.S. attorney's office in Columbia, would neither confirm nor deny that an investigation of the allegations was under way.

Niven's lawsuit, filed Feb. 14, claims that United supervisors committed an array of illegal or irresponsible acts in Charleston, among them failing to provide mechanics with essential tools and forcing them to use sealant to disguise improper riveting on engine cowlings, or covers.

The defendant in the lawsuit is AAI Engineering Support, which hired Niven as a mechanic after he left United in May 2001.The firm promoted Niven but then discharged him in January 2002 "based on a demand from United Airlines," the lawsuit states.

AAI spokeswoman Susan Flowers said the company had no comment on the case.

Niven is not the only one who has leveled serious charges against United in Charleston. In a Feb. 5 lawsuit, United mechanic Larry James contends that managers with the airline and Pratt & Whitney, which makes and helps maintain C-17 engines, pressured him to change a report about a damaged fuel injector in 2000.

James was fired after refusing to make the change, the suit says, but was reinstated five months later after filing a union grievance. He is seeking lost wages.

"We believe that this case is completely without merit and will defend it vigorously," said Laurie Tardif, a spokeswoman for Pratt & Whitney.

Rocky Mountain News
United mechanics' jobs in jeopardy
Thousands face layoffs if airline gets go-ahead to contract more work
January 25, 2003

By David Kesmodel

Already bracing for long-term pay cuts, United Airlines' mechanics have another worry: that the bankrupt carrier will get approval to farm out more of its aircraft maintenance.

Such a move could result in thousands of more layoffs among the airline's 11,300 mechanics.

United, which aims to shed $2.4 billion a year in labor costs to stay viable, wants to scrap language in its mechanics' contract that caps maintenance outsourcing at 20 percent.

It also wants to remove restrictions that keep it from sending maintenance work to foreign facilities and from selling or leasing any of its three major U.S. repair centers.

United has proposed the revisions as part of negotiations on concessions with the International Association of Machinists.

The carrier is in talks with all its labor unions on sweeping pay, benefit and work-rule changes. The unions agreed or were ordered by a judge this month to take temporary pay cuts; the cuts were designed to help United meet terms of its bankruptcy financing and to buy more time to negotiate long-term cuts.

IAM spokesman Joe Tiberi declined comment on United's proposed outsourcing revision. In December, the union's international president, Tom Buffenbarger, told USA Today that the proposed revision "rips out the heart and soul of our contract."

United spokesman Chris Brathwaite declined comment. In bankruptcy-court papers, United says further outsourcing could save hundreds of millions of dollars a year "without any loss of quality or impact on safety."

Mechanics would get to vote on any contract changes. The airline, however, could ask Bankruptcy Judge Eugene Wedoff to impose changes if an agreement isn't reached.

United, Denver International Airport's dominant carrier, has major repair centers in Indianapolis, San Francisco and Oakland, Calif. Workers at the centers would face the greatest risk of layoffs if United is able to contract out more work.

Further outsourcing would affect only a small number, if any, of Denver mechanics, said Bruce Strand, head of Denver consulting firm Strand Associates Inc.

About 870 of United's 7,300 Denver workers are mechanics, including the technicians at United's flight training center near the former Stapleton Airport. United's aircraft mechanics at DIA handle "line" maintenance in between flights, which includes scheduled checks and unexpected repairs. They don't do "heavy," or overhaul, work.

United reaps cost savings of 30 percent or more through outsourcing, Strand said. The savings come partly because many vendors are nonunion. Also, they usually employ fewer federally licensed mechanics.

Many carriers send at least some maintenance work to vendors. Discount carrier Southwest Airlines Co. handles all its repairs that way. The worldwide maintenance overhaul business is worth $37 billion annually, with about half going to contractors, Strand said.

Some United mechanics complain maintenance performed by contractors is sub-par. One big airline, America West Airlines, was fined heavily - $2.5 million - by the Federal Aviation Administration five years ago for violations involving work done by contractors.

United strongly disputes that third-party maintenance is of lower quality. "We don't compromise the safety of our aircraft," United's Brathwaite said. Under the law, the FAA subjects contractors to the same safety rules as airline mechanics. Contractors are not required to have licensed mechanics working on jets, but a licensed mechanic must inspect and sign off on work before a plane returns to the skies.

"United has a maintenance plan for its aircraft fleet that's been approved and accepted by the FAA, and, therefore, United is obligated to maintain its aircraft in accord with those standards," FAA spokesman Mike Fergus said. "The standards are used by both outsourced as well as United mechanics."

As part of FAA oversight, "we have to stay way above board," said Lou Churchville, director of business development at Greensboro, N.C.-based TIMCO Aviation Services Inc.

TIMCO and Mobile, Ala.-based ST Mobile Aerospace Engineering Inc. handle the bulk of United's outsourced maintenance.

Churchville says TIMCO has an excellent record for quality that's comparable to the best airlines' maintenance work.

For maintenance on United planes, TIMCO has been named in only one proposed FAA fine of more than $50,000 since 1998. That was for work it did on a United Boeing 737 that flew 17 flights from March 25 to April 3, 2001, with parts of its fuel system missing or installed improperly.

The FAA proposed a fine of $200,000 against United for flying the plane "in an unairworthy condition." United settled the case for $33,000, and TIMCO reimbursed the airline.

More recently, Mobile Aerospace did work on a United plane prior to an incident that is under investigation by the National Transportation Safety Board.

According to the NTSB, pilots flying a United jet from Chicago to Los Angeles on Nov. 21 returned to Chicago after takeoff because they were unable to retract the nose gear.

The Airbus A-319 touched down with the nose gear wheels turned 90 degrees. Both nose gear tires blew and the wheel's assembly was ground down nearly to the axle. None of the 82 passengers and crew was injured.

The NTSB said the nose gear was overhauled during maintenance at Mobile Aerospace before the incident.

An NTSB spokeswoman declined to comment beyond the incident report. A Mobile Aerospace official said it would be "highly inappropriate" to comment on an ongoing investigation.

The incident has come under heavy criticism by some airline mechanics. For weeks, a picture of the damaged jet was shown on www.the-mechanic.com, a popular Web site for mechanics.

"We've investigated this thoroughly," Brathwaite said. "We're working with all interested parties to ensure it doesn't happen again."

Courier Post
Airline Angers Widows of Pilots
September 8, 2002

By EILEEN SULLIVAN

United Airlines is proud of the way it treated the wives of the four pilots killed after terrorists hijacked two of its planes Sept. 11.

But the widows say the airline made a horrible year even worse.

United's oversights in the crashes' aftermath - such as notifying one wife of her husband's death in an answering machine message - were hurtful and insincere, says Melodie Homer of Marlton. Her husband, LeRoy, was the first officer on United Flight 93, which took off from Newark and crashed in a western Pennsylvania field.

But more importantly, Homer says, United and its parent company, UAL Corp., refuse to take steps crucial for ensuring other United employees' families never have to go through the unnecessary heartache United caused her.

"It just feels like a total slap in the face after everything we've been through," Homer says.

The airline, however, insists it did everything it could - and more.

"From United Airlines' standpoint," says company spokesman Joe Hopkins, "we're proud of what we have done in terms of compensation for all of the victims of both of the accidents."

Here's why Homer, and two other pilots' spouses left behind, say United has no reason to be proud:

On 9/11, United delivered the news about their husbands' deaths over the telephone. In Miriam Horrocks' case, that meant leaving a message on the Pennsylvania woman's answering machine. Her husband, Michael Horrocks, was the first officer on Flight 175 - the second hijacked plane that crashed into the World Trade Center.

In a condolence letter Melodie Homer received about two weeks after 9/11, United asks Homer to inform her mother-in-law that she's no longer allowed to travel for free on United.

"Travel benefits for parents cease with the death of the employee," the letter says. "Please convey this information to LeRoy's mother, Ilse Homer, if she survives him."

A memorial plaque United delivered to Melodie Homer shortly after 9/11 misspelled LeRoy's name.

United shortchanged the pilots' families in their husbands' final paychecks. The company didn't apologize for the mistake when a pilots' union demanded United adjust the checks, according to a May 9 letter to UAL from Stephen M. Cohen, the attorney handling Horrocks' estate.

Homer and her daughter Laurel, now 22 months old, were still covered under LeRoy's insurance, but her husband' s identification number had been deleted from the company's computer system right after 9/11. That meant they couldn't use their insurance. United eventually reinstated the identification number.

Homer didn't receive a phone call from UAL's then- CEO, James E. Goodwin, until four days after the attacks. " It sounded really insincere," she says of the call. "I was probably on the phone for 30 or 40 seconds."

Immediately following the attacks, Goodwin didn't attend any of the 18 employees' individual memorial services, Homer says. "And here's (New York Mayor Rudolph) Giuliani, he attended all these funerals."

In a letter to the wives stating how United planned to remember the four pilots, the company didn't even get all four pilots' names correct. United wrote: "LeRoy, Homer, Victor and Michael." Instead of Homer, it should have been Jason, for Flight 93 pilot Jason Dahl of Denver.

"And the whole letter lacked empathy," Homer says. "They've had complete lack of respect for the 18 families involved. Don't they think this could be them?"

Crisis plan sought

United contends it's done the right thing, but refused to discuss with the Courier-Post specifics of the wives' complaints.

"We've met everything that we're contractually responsible for, and we've gone above and beyond and done other kinds of compensation for them," Hopkins said.

But the airline's efforts were woefully inadequate, and it needs to re-evaluate the way it treats employees and their families, the pilots' wives insist.

That's what Homer wants to speak out about from her experiences as the 9/11 anniversary approaches.

"I don't really see how talking about my year and how crappy it's been can help somebody else," Homer said. "But this can help somebody else."

Homer, Horrocks and Ellen Saracini - whose husband, Victor, was the pilot on Flight 175 - all feel strongly that United should create a crisis plan to respond to families when an employee is murdered in the line of duty.

"Who'd have ever guessed that Sept. 11 would happen. It's just something so out of whack that I don't think anybody was prepared for it," says Steve Derebey, communications chairman for the United pilots unit of the Airline Pilots Association, a national labor union.

The union has its own emergency management plans and teams, specifically the Critical Response Committee, Derebey says.

"(On Sept. 11) our contingency plans were put into place much quicker than the company's were," Derebey says. "We had people with the families almost immediately after it happened."

Derebey is a United pilot based in Chicago. Since 9/11, he's often had thoughts that it could have been him on one of those planes. Thinking of how his own family would be contacted, he was shocked to hear that United would deliver such terrible news over an answering machine.

"If that in fact happened, that's horrible. I can't imagine anything worse," Derebey says.

What would be worse, Homer says, would be if United doesn't learn from its mistakes.

When asked about creating such a crisis plan, United said it already has emergency management plans.

United constantly works on a "comprehensive emergency response program," Hopkins says. The plan is revised all the time, and employees practice emergency procedure drills.

Just a few months ago, Hopkins says, United employees practiced drills in the event of a smallpox epidemic on an airplane - an example of United "thinking outside the envelope of things that happened previously."

He says, "Whether it's a hijacking or whether it's something mechanical in the airplane, it's the same."

But the crisis plan these three 9/11 widows seek is not the same.

"It should include everything from how notification is carried out to response at the home from the company, as well as appropriate support, and then follow up where there is a single point of contact for ongoing issues," Homer says.

One United pilot, a friend of the Homer family, even drafted a six-page crisis plan for United that included those points.

CEO John W. Creighton never responded to it.

The widows made a personal appeal with little progress.

Homer, Horrocks and Saracini met with Creighton in February to discuss the treatment they'd been receiving since the attacks.

Several weeks later, Creighton wrote a response that didn't address most of the widows' concerns. On top of that, Homer says, the letter was "so cold."

United won't budge

But there are two sides to every story, Hopkins says.

"We think United Airlines has done a very fine job of meeting the needs of the families," he said. "We don't necessarily agree with the things that the pilots' wives have begun to talk about."

In another letter to Homer, Creighton defends the company's response to the tragedy by citing a fund UAL created after the attacks.

The Employees' Families Fund raised about $500,000 that was distributed among the 18 families. United employees, retirees, customers and vendors donated $417,761 to the fund. UAL kicked in $100,000.

"While the Airline Pilots Association and employees at United have been very supportive, compassionate and helpful during the past year, the senior management of United showed very little sensitivity to the loss of their 18 employees on that fateful day," Homer, Horrocks and Saracini said in a joint statement Thursday. "They have treated the deaths of these employees like accidents and certainly not the tragedy that it was in the eyes of everyone."

Still, United stands proud.

"We think we've done a good job in meeting their needs," Hopkins says.

Yet Homer says the poor treatment goes beyond 9/11 - it' s an ongoing problem for all United employees as the airline flounders.

"We're just so tired of even United asking their employees for pay cuts," she says.

The airline industry suffered severe economic consequences after Sept. 11.

In 2001, United lost $2.1 billion - more than any airline has ever lost in one year.

"The management at United has got to go. That's the only way anything positive will come out of the company," Homer says. "This particular management team does not seem to value its employees."

The company is 55 percent worker-owned. Its stock closed Friday at $3.08, down 14 cents. On the same date a year ago, the stock was $31.75.

In October, UAL spent $5.7 million to buy out then-CEO Goodwin's three-year contract, appointing Creighton in the interim.

Just this past Monday, UAL named Glenn Tilton to replace Creighton, who is 70.

"Our highest priorities must be to restore employee trust," Tilton said last week.

And that can begin with the company showing sensitivity and respect, something it lacked over the past year, Homer says. "There's not an amount of money that could fix what happened or make anything better for my daughter or myself," she says. "But it would have been nice to be treated better by them."

Forbes
Are Airplanes Safe Enough?
April 2002

Mark Tatge

Mechanics are squawking that airlines are skimping on maintenance. Crash statistics don't bear out their complaints -- yet. Gassed up and loaded with passengers, United flight 9921 was preparing to leave Dulles International for Boston on Sept. 4, 2001. But for some reason the front passenger door on the Boeing 737 wouldn't close. Called to the tarmac, the mechanic removed the inner door panel and found the answer: The door was falling off. "I saw all these faces looking out the little windows, and I thought, What if this thing had opened in flight?'" he recalls. One of UAL's maintenance subcontractors had forgotten to connect all the bolts when the jet was overhauled the week before. "It was something that slipped through that shouldn't have," says David Latimer, vice president at Triad International Maintenance Corp. Timco employees involved were disciplined, and controls were tightened.

Both Timco and United, Latimer says, told the Federal Aviation Administration, charged with regulating airline safety, about the problem -- no fines resulted. But the FAA did levy fines in other episodes of maintenance and safety oversight. A United 737 flew 17 flights from Mar. 25 to Apr. 3, 2001 with parts of its fuel system missing or improperly installed. The FAA fined UAL $200,000 for operating the jet in an "unairworthy condition." In another instance, in 1999, American Airlines completed 198 flights with inoperable backup batteries to power the emergency aircraft lighting that guides passengers to the exits in a crash. That, coupled with broken chargers and defective battery cables uncovered in a 1999 FAA inspection of American facilities, resulted in penalties of $1 million. The FAA hit US Airways last June with a $245,000 fine for flying an Airbus A330 hundreds of extra flights without inspecting the engines for defects (the law requires they be checked every 2,000 flight hours). Alaska Airlines incurred a $211,000 penalty in March 2001 for flying an MD-80 in what the FAA called "an unairworthy condition" after it sustained damage to a strip on a landing-gear door. The jet made 47 flights before being repaired.

Are airlines getting sloppy with their maintenance? The mechanics say yes; the airlines say no. Such is the rarity of crashes that it's hard to pick up a trend in only a few years of data. For now, at least, the data suggest that air safety is improving. Excluding incidents of suicide and sabotage, U.S. carriers had 11 fatal accidents, killing 439, in the five years from 1983 to 1987, versus 14 fatal crashes from 1997 to 2001, which killed 634. This increase occurred as the number of departures more than doubled between the earlier and the later periods. Serious accidents, including fatalities -- caused by weather, pilot error and maintenance slipups -- have doubled over time: 102 crashes from 1983 to 1987, versus 211 from 1997 to 2001.

The last crash blamed on bad maintenance was the Jan. 31, 2000 Alaska Airlines flight 261, which plunged into the Pacific, killing 88 people. Investigators are focused on a jackscrew that controlled the horizontal stabilizer. Reacting to the tragedy, the FAA conducted a review of maintenance at nine carriers. Released in late February, its report was delayed nearly a year, in part so the airlines could comment on it. Singled out for maintenance lapses were America West Airlines and American Airlines, while United and Northwest Airlines were commended for their internal audits.

Mary Schiavo, former inspector general of the U.S. Department of Transportation, doesn't take comfort in the FAA report. "Airlines are allowed an awful lot of leeway in what they can get away with," she says. "The FAA pretty much leaves it up to the carrier to decide what needs to be fixed." When the agency does levy a fine, the airline can appealoften resulting in a reduced penalty or one that disappears. America West halved a $5 million levy for what the FAA called "serious" maintenance problems in 1998.

Even without an FAA, carriers would invest in safety. They have reputations to protect and liability insurance to buy. But since they lost $6 billion last year, they are desperately looking to cut costs. Airlines spend on average 12.3% of operating expenses to keep planes flying, the third-highest noncapital cost after labor and fuel.

Nowhere is the heat more intense than at the number two carrier, UAL. Dogged by fractious labor relations and poor on-time performance, it is struggling to get its planes turned around quickly and employment down. In the last year it has shed 20% of its mechanics, to 12,587 -- but has cut departures by 25%, to 1,800 a day.

What do United mechanics say? FORBES spoke with more than a dozen in Denver, Portland, San Francisco, Chicago and Washington, D.C., who complain they face disciplinary action for writing up maintenance problems when doing so would interfere with UAL's on-time performance. As one United supervisor in Portland, Ore. told his mechanics, "I want you to be blind and on quaaludes when you go into that cockpit." UAL says the complaints are from "disgruntled mechanics" trying to win concessions in the recently settled five-year contract. They received a 37% raise, the first pay increase since taking salary cuts in exchange for stock since 1994.

A pay raise isn't much solace for Denver mechanic George T. Davis. United fired him after he wrote up two aircraft for mechanical problems in 2000. In a whistle-blower complaint he filed with the U.S. Department of Labor, Davis told the captain of a flight headed for Ontario that his plane had a hydraulic leak that could have busted the line, impairing the pilot's ability to control the jet. Davis' supervisor disagreed and tried to clear the plane for takeoff. The captain intervened, refusing to fly until the leak was fixed. Davis' complaint says he also wrote up a tire on an Airbus A320 after finding a 1-to-2-inch gash in it. His manager insisted the tire was fit for takeoff; the pilot demanded the tire be changed. (Davis has since been reinstated but is fighting for lost wages.)

According to testimony before the General Accounting Office by members of the Aircraft Mechanics Fraternal Association -- which represents mechanics at Northwest, among others -- "managers' income at many airlines is now directly tied to the level of maintenance delays." The GAO is investigating the effect of a decline in the number of mechanics' jobs.

It's impossible to say how widespread supervisory lapses may be. Internal maintenance records suggest that managers at United's O'Hare hub have signed off on planes as airworthy, when they were not. In one case a Boeing 727 had problems with its aileron, the small hinged sections on the outside of the wing that permit a jet to bank on a turn. Records show the 727 left Chicago on July 16, 2001 for Charlotte, N.C.despite a report by the flight crew claiming the right aileron jerked to the right while airborne. The maintenance supervisor signed off on the plane before it left, saying he had been "unable to duplicate" the problem on the ground; he suspected moisture had caused the aileron to stick. He had mechanics lube the assembly and sent the jet on its way. But en route to Charlotte, the 727 crew had the same trouble. Once on the ground they refused to fly the plane until it was fixed and taken on a test flight. Mechanics tore apart the wing and found cables were jamming in the pulleys that operate the aileron.

A 727-200 flew for a month -- May 24 to June 20, 2001 -- before repairs were made to its horizontal stabilizer. Located on the tail of the aircraft, the stabilizer allows a pilot to control the tendency of the plane to pitch up or down. The motors that activate the stabilizer weren't working, and the pilot had to use a hand crank. Mechanics wrote up the defect on four occasions; within a few days, according to one mechanic, the plane was finally repaired. (United denies these episodes occurred.)

"Do we make errors? You bet," says Ronald Utecht, United's senior vice president of engineering and maintenance. But, he says, United does not put unsafe airplanes in the air. "We do everything we can to fix a plane -- 99% of the writeups get fixed the first time."

United is by no means the only carrier with maintenance problems. Testimony before the GAO claims that mechanics at all major airlines are frequently threatened by supervisors that "the discovery of too many' maintenance discrepancies" will result in more work shifting to subcontractors -- even though managers "generally concede that these subcontractors are notorious for their inferior workmanship and use of unlicensed staff." The testimony cites the arbitration case of a Northwest Airlines mechanic fired for excessive writeups; it goes on to say that Northwest's own managers confirmed that planes were allowed to fly "in an unairworthy condition" while carrying passengers.

Daily Herald
United's aim now survival
February 02, 2002

By Mike Comerford

With fear of bankruptcy looming in the air, UAL Corp.'s United Airlines on Friday announced it lost $2.1 billion last year - and prospects for this year look dire.

In the face of continuing losses, United Chief Executive Officer John Creighton called on the Elk Grove Township-based airline's 81,000 employees for billions of dollars worth of unspecified concessions in the next few years.

Union officials responded by saying they'll decide on that when all union contracts are signed and when specific give-back proposals are made.

Post-Sept. 11, United is one of the hardest-hit airlines in the industry. Its fourth-quarter revenue plunged 38 percent.

Conditions aren't a whole lot better of its major competitors, with most also reporting massive and ongoing losses.

Eight of the largest airlines in the country posted $3.2 billion in losses in the fourth quarter alone.

UAL's loss of $10 million a day in the fourth quarter helped push the domestic airline industry to a record year-end loss of as much as $9 billion.

The prognosis for United remains poor and the cure has yet to be found, said Michael Boyd, of The Boyd Group, an Evergreen, Colo.-based commercial airline consulting firm.

"A year from now (we) could be talking about who will pick up the pieces of United Airlines," said Boyd, who nevertheless believes the airline will survive in some form.

UAL Chief Financial Officer Jake Brace steadfastly declined to comment Friday on the possibility of bankruptcy when questioned by reporters during a conference call, though he did say he thought the airline had sufficient cash reserves to work through its problems.

Some investors, however, were trading like bankruptcy is a real option for the nation's second-largest airline.

"Unsecured bonds are trading like UAL is going into bankruptcy," said Bill Mastoris, managing director of research for BNY Capital Markets Inc., a firm engaged in bond trading. "I think at the very end of the day, they avoid bankruptcy after some brinkmanship negotiations."

United's challenges this year undoubtedly contributed to its stock falling nearly 9 percent Friday to $13.43, down $1.27, and well off its 1997 high of $101.75.

Shares in the employee-owned airline have lost almost two-thirds of their value in 12 months.

On Friday, UAL said its fourth-quarter loss widened to $308 million, or $5.68 a share, from $71 million, or $1.40, in the year-earlier quarter. Although an unprecedented loss, it still beat analyst expectations of a $14.96 a share loss. The carrier attributed the better-than-expected performance to cost-cutting and a pickup in air travel.

But for the year, UAL lost $2.1 billion, or $40.04 per share.

AMR Corp.'s American Airlines, the country's largest airline, didn't fare much better, with an year-end loss of $1.8 billion.

Low-fare Southwest Airlines was the only airline of the top nine in the country to end the year with a profit - $511 million.

United was unprofitable before the terrorist attacks but since then has been disproportionately affected.

After the attacks took down two United planes, the airline made plans to cut 20,000 jobs and shave 23 percent of its seat and flight capacity. It also narrowed its flight schedule to a 7 a.m. to 7 p.m. takeoff period.

United's 18 percent decline in December passenger traffic was exceeded only by US Airways Group Inc.

Dallas-based American Airlines has said it's gaining market share in United's West Coast niche. Discounter Southwest Airlines Co. is starting new service from Midway Airport.

The early signs for United in the coming year do not bode well.

UAL President Rono Dutta said yields for business travel, which United heavily relies upon, are down about 20 percent.

"United has to roll back pay and adopt a rational flight schedule," said Aaron Gellman, former director of Northwestern University's Transportation Center and a member of two Federal Aviation Administration advisory committees

However, Brace said unresolved labor contracts with mechanics and other ground workers, represented by the International Association of Machinists, continue to be an impediment to turning the airline around.

United's labor costs account for 38 percent of total expenses, among the highest in the industry.

The airline is now trying to work out agreements with its 15,000 mechanics and 30,000 ground workers. UAL did recently accept a specially appointed presidential board's recommendation that the airline offer its mechanics raises of up to 37 percent.

Mechanics will vote on the proposals on Feb. 12. Negotiations with other unionized employees resume Feb. 11.

Brace declined to give a timetable for when the airline could get on track for profitability but said the company's cash balance of $2.6 billion should sustain it until solutions can be found.

United said Friday it will begin increasing its number of flights 7 percent by April, but the challenge will be winning customers back with better customer service, said Jeremy Cooperstock, a McGill University professor who runs Untied.com, an independent Web site that draws comments from those upset with the company.

Improving employee relations is key, Cooperstock said.

"We hear from passengers and employees," said Cooperstock, who teaches electrical and computer engineering. "Some of the stories they tell are incredibly bad. Dramatic changes are needed."

CNN
United Airlines chief quits
October 28, 2001

CHICAGO, Ilinois (CNN) -- United Airlines Corp. announced Sunday that James E. Goodwin is stepping down as the company's chairman and chief executive.

He will be replaced by John W. Creighton, who was elected by the unanimous vote of the company's board of directors, the company said in a statement posted on its Web site. Creighton is a member of the board. The airline industry has been hard hit by the September 11 attacks, with the number of passengers dropping precipitously. Two of the hijacked jets used in the attacks were United flights.

"Our immediate goal is to restore United's financial stability," Creighton said. "We intend to work hand-in-hand with our employees and unions to accomplish this task by developing innovative solutions to the issues we collectively face."

Said Goodwin, "United is a great company and it is the right time for a new leader to guide the organization through the challenges that lie ahead."

Creighton has been a director of UAL Corp. since 1998. Earlier, he served as president and chief executive officer of Weyerhaeuser Company from 1991 through 1997.

He has a law degree from Ohio State University and an MBA from the University of Miami. He also serves as a director of the Oregon Shakespeare Festival.

Washington Post
United Air Union Head Says Faith in CEO 'Lost'
October 26, 2001

NEW YORK -- Linda Farrow, president of United Airlines' (UAL) Association of Flight Attendants union chapter, said "an overwhelming majority of United Airline's employees have lost faith in our CEO," the Washington Post reports in its Friday edition.

In a statement released Thursday, Farrow said employee relations "are at an all-time low," according to the Post.

United Airlines employees kept up their calls for the ouster of chairman and CEO James E. Goodwin yesterday, the Post reported.

Daily Herald
Why United Airlines is in such trouble
October 18, 2001

By Mike Comerford

When those four planes crashed on Sept. 11, they made confetti of United Airlines' plans for a comeback anytime soon, and now its chief executive is raising the specter of no comeback at all.

How this could happen so quickly to what was once the nation's largest, most powerful airline is the story of a chain reaction that isn't yet finished. Even before the terrorist attacks last month that took two of its planes, UAL Corp.'s United Airlines was weakened by union unrest, high labor costs, low customer satisfaction ratings, rising fuel prices, a failed merger, an expensive venture into business jets, record losses and a slowing economy that robbed it of lucrative business travelers.

The airline could lose more than $2 billion this year even as it lays off 20,000 of its workers and cuts flights by a third to reduce its costs. It is also concentrating flights to between 7 a.m. and 7 p.m.

United is getting about $800 million in cash as part of a $15 billion federal bailout of the industry, but has said that will not cover losses. Chief Executive Officer James Goodwin added to the crisis mentality at the airline this week. In an internal memo that was leaked to the press before it was circulated fully to employees, he said the airline "will perish" next year if it continues "hemorrhaging money."

The employee-owned airline's unions are blaming Goodwin for the airline's reversal of fortune since he was appointed in 1999.

"There is no doubt this isn't all his fault," said Frank Larkin, spokesman for the International Association of Machinists and Aerospace Workers. "But there have been a lot of missed opportunities over the years too."

Specifically, Goodwin's failed attempt at an $11.5 billion merger with US Airways was highly unpopular with the unions. That action, which failed last summer after 15 months of government antitrust review, contributed to many of United's pilots deciding to refuse overtime in the summer of 2000. That led to record cancellations, tied up the nation's air transportation system and alienated customers.

His decision to go ahead with the Elk Grove Township-based airline's plans for spending millions of dollars on new business jets while making layoffs is another thorn, Larkin said.

United's defenders point out the entire industry is suffering from the closing down of airports and the downturn in ridership following the terrorism attacks. They say the airline industry for years has operated on razor thin margins that were always vulnerable to an economic slowdown, labor unrest and a shift in travel habits.

"What went wrong at United?" said George Hopkins, professor of airline history, Western Illinois University, Macomb. "The economy went bad and when you add (Sept. 11) to that you have what you have now."

Wall Street analysts have been critical of United's prospects since last year when the airline settled a contract with the Air Line Pilots Association that gave pilots wage hikes of 30 percent and more.

"The pilots not only drove away customers but they left the airline with an uneconomical cost structure," said Raymond E. Neidl, an airline analyst for ABN-AMRO Securities, adding that United was also weakened by a high debt load.

Some analysts say that a combination of that debt and new debt to finance current losses could be enough to force the airline into Chapter 11 bankruptcy protection next year. But few foresee the likelihood of United liquidating.

Given its size and importance to the transportation system, even if it was to enter bankruptcy, it would continue to operate, they say. Yet even talk of bankruptcy indicates how far the airline has fallen since late last year when it posted its first quarterly loss since 1993.

Each of United's weaknesses contributed to the chain reaction that has lead to its staggering fall, said Joseph Schwieterman, director of the Chaddick Institute for Metropolitan Planning and Transportation, DePaul University, which studies the airline industry.

"Unions say it's management and management says it's costs," Schwieterman said. "So many things came together at once for United there is enough blame to go around for everyone."

United: Airline a victim of bad timing, some say

Dow Jones Newswires
Airline Stocks Down On United CEO's Comments
October 17, 2001

By Pat Maio

LOS ANGELES -- Airline stocks were among the biggest losers on Wall Street on Wednesday after United Airlines Chief Executive James Goodwin said the nation's No.2 airline may go out of business sometime next year if it can't stem mounting losses caused by the Sept. 11 terrorist attacks.

Wall Street Journal
United Airlines Drops Its Plans For Controversial US Air Acquisition
July 1, 2001

By Susan Carey

CHICAGO -- UAL Corp.'s United Airlines is walking away from its controversial plan to acquire US Airways Group Inc., because of regulatory resistance and the worsening economy, people familiar with the matter said.

After a meeting of UAL directors last week, United told US Airways it wants to discuss terminating their agreement prior to the Aug. 1 walkaway date. At that time, United can unilaterally drop the deal and pay US Airways a $50 million breakup fee. It wasn't clear today whether an early termination would be accepted by US Airways or whether the carrier might sue United.

US Airways declined to comment Sunday, as did United. AMR Corp.'s American Airlines, which was brought into the transaction in January as a buyer of some $1.2 billion of US Airways assets, couldn't immediately be reached.

People familiar with United said the nation's second-largest airline has become convinced in recent days that its merger never will win the approval of the Justice Department. "It doesn't seem like there's any hope of getting it done," said one person. Moreover, the prospect of a costly, complicated merger in the weak economy is increasingly unattractive, these people said.

United explored many ways to restructure the deal to win approval, one person said. But nothing seemed to do the trick and Justice Department lawyers continued to be concerned about concentration of market power in Washington and other markets.

There had been some thinking that United wanted to reprice the deal, which would pay US Airways shareholders $60 a share, a sum almost three times the stock's current price. But people familiar with United said the company isn't trying to negotiate a new price, but is "walking away" from the transaction, which has provoked noisy opposition since it was announced in May 2000.

Wall Street Journal
United Air Flight Attendants Vote To Strike
April 3, 2001

Dow Jones Newswires

CHICAGO - UAL Corp.s (UAL) United Airlines threatened legal and disciplinary remedy against any illegal job actions by flight attendants who voted to strike should the company proceed with its purchase of US Airways Group (U) without the union's consnet.

In a press release Tuesday, the Association of Flight Attendants said its members voted in favor of a "CHAOS" strike, which includes actions such as random, unannounced strikes.

The union has alleged that the $4.03 billion merger would result in an illegal change to the attendants' contract.

In a separate release Tuesday, United Airlines said the union hasn't justified a "huge pay raise" and called the atempt at a mid-contract raise "inappropriate."

The US Airways merger is currently slated to close by the end of June.

The Straits Times
Man dies unnoticed on flight to Singapore
February 23, 2001

By Krist Boo

The American, whose death was discovered only after plane landed, 'looked ill' during the trip from HK

A 51-YEAR-OLD man died unnoticed while on a United Airlines (UA) flight from Hongkong to Singapore and was discovered only when the crew tried to wake him up to leave the plane after it landed.

The man, an American from New Jersey, was found slumped in his economy-class seat after the plane landed at Changi Airport at 12.31 am last Saturday.

Another American passenger, who sat behind him, thought he was merely asleep and left after alerting a stewardess to wake him.

He found out a few days later that the man had died.

He told The Straits Times: 'I didn't know until I returned to Hongkong. I was shocked.

'I called UA, I wanted to let his family know what happened to him during his last moments.

'But a supervisor said to me, 'We are trying to keep it quiet'. That really bothered me.'

The Hongkong resident with a Singaporean wife said that he regretted not persisting in trying to wake the passenger, whom he described as about 1.8 m tall, overweight and with curly blond hair.

He said: 'As I was getting out of the plane, I punched him and said, 'Hey you, wake up.'

'I saw the stewardess, and I said, 'Hey, better get this guy up.'

'I can't say if she took any action. There were people behind who were pushing me, so I just took my bags and left.

'I feel bad. I wished I had stopped and knocked the guy harder.'

The man had looked ill and used the toilet several times towards the end of the 3 1/2-hour flight, he said.

'Before the plane landed, he went to the loo. He didn't look so good. He was almost ashen-faced,' he added.

UA had said that the crew had tried its best to save the sick man.

Singapore police said that an autopsy had been done and results would be referred to the coroner at a later date.

The American Embassy in Singapore said that the body of the dead man was flown back to the United States early this week.

AIRwise News
United And US Airways Roll High For Merger
December 2, 2000

United Airlines and US Airways spent more than USD$2.3 million in the first half of the year lobbying the federal government on issues including their proposed merger, House records show according to a Scripps Howard News Service report.

Among lobbying allies for the airlines according to Scripps-Howard are Kenneth Duberstein, a former chief of staff to Republican President Reagan; Thomas Boggs Jr., whose parents were Democratic members of Congress; and Jonathan Yarowsky, former special counsel to President Clinton's White House.

The departments of Justice and Transportation are studying potential antitrust problems with the USD$4.3 billion merger, but officials will not say when a decision is expected. The airlines are hoping for a decision in January.

United has emphasized how the deal would start new competitive service in many areas of the United States, including 32 markets on the East Coast alone.

The Senate Commerce Committee earlier passed a resolution raising potential problems for consumers, such as how only one carrier would be offering nonstop flights between at least 26 domestic airports in 12 states.

Also, there would be 20 hub airports where a single airline and its affiliates would carry more than 50 percent of the passenger traffic, the committee said.

According to the airlines' most recent semiannual reports filed with the House public records office, which were reviewed by Scripps Howard News Service, United had spent nearly USD$1.6 million to lobby for or against various proposals. US Airways filed about USD$800,000 in expenses.

More than 10,000 members of the Association of Flight Attendants' chapter at United have written to Justice officials to object to the merger, spokeswoman Bobbie Pilkington said. The union is in a dispute with management in seeking a new wage package.

"United has trouble managing what it has. They have the worst on-time record in the industry. They have one of the worst lost-baggage reports. How are they going to do this?" Pilkington said.

United has blamed labor problems, weather and other factors beyond management's control for flight delays.

Rocky Mountain News
United's tab in lawsuit: $3.27 million
Jury awards 6 ex-workers for loss of air-travel benefit
December 1, 2000

By John Accola
Denver Rocky Mountain News Staff Writer

Six former United Airlines employees forced off the carrier's Colorado payroll in a corporate restructuring have been awarded $3.27 million for the loss of a coveted fringe benefit: free air travel for life.

Following a monthlong trial in Arapahoe District Court, a six-member jury found that United had broken its promise to provide the plaintiffs with lifetime flight benefits when they were transferred 13 years ago with 1,000 other workers to a subsidiary company in charge of computer reservation operations.

"United used these benefits aggressively to recruit and train employees who were involuntarily transferred to another company," said Denver attorney Dean Heizer, who represented the plaintiffs. "These people were never fired and never quit. They were dedicated employees not vengeful who were promised something and deserved to have that promise kept."

United's Denver counsel, Lisa Hogan, said it's unlikely that the jury verdict will hold up in a higher court. "It's such a strong appellate case, I think that is the next step," Hogan said.

Verdicts for each of the six plaintiffs, including two retirees, ranged from $340,000 to $640,000 compensation the jury determined represented the replacement value for the loss of flight benefits.

But the $3.27 million verdict, reached Wednesday night after a day and a half of deliberations, could suggest a fraction of United's potential liability. Heizer and co-counsel, David Seserman, both from the law firm of Gorsuch Kirgis, are representing 93 other Colorado plaintiffs in the same lawsuit. At United's request, Judge Timothy Fasing agreed to hold a series of trials, limiting the number of plaintiffs and hopefully making the mass litigation easier for jurors to understand.

"You can compute the math for the remaining 93 plaintiffs and the potential exposure is $50 million plus," Heizer said.

During the trial, United maintained its Covia Corp. affiliate, set up to run United's $1 billion Apollo computer system, was solely responsible for maintaining the fringe benefits of the transferred workers. Covia initially provided a similar free travel program to the former United workers. However, those benefits gradually were eliminated as United reduced its ownership stake in Covia today a publicly traded company known as Galileo International, headquartered at the Denver Tech Center.

United and Galileo, a co-defendant in the 4-year-old lawsuit, argued the plaintiffs were "put on notice" in 1987 and 1988 that when their employment with United ended, they would receive no further benefits from United.

In a pretrial brief, United said the plaintiffs wrongly assumed Galileo would match the carrier's flight benefit program "based on years of receiving and enjoying a subsidized employee benefit ... that their current employer has determined is no longer in the best interests of the company to continue."

"That may be a basis for frustration, even remorse," said United. "It is not a basis for a multimillion-dollar contract claim."

Evergreen resident Daniel W. Osband, 67, one of the six initial plaintiffs, sued in 1996 after a letter-writing campaign he organized for the transferred Colorado workers failed to convince management at United and Galileo to restore the old flight-benefit package. That would have required the defendants to offer free, unlimited space-available flight benefits on United routes, including free flights for immediate family members. In addition, eligible workers would be entitled to fly on more than 100 other airlines throughout the world, typically at a 90 percent reduced fare.

"Basically, they were told to jump in the lake, and that their claims had no merit," Heizer said. "That left them with only one choice and that was to sue."

The jury awarded Osband $640,000.

Larry Gelfond, a Denver accountant, testified on the monetary value of the flight benefit program. Since United employees usually book their free flights within days of departures and frequently travel first-class, Gelfond calculated the benefit using some of the airline's highest ticket prices.

Hogan said the trial turned emotional when several of the plaintiffs testified how much the free trips meant to their families.

"The jurors would have had to be rocks to not be affected by that testimony," Hogan said. "It was just a very complicated case that had a lot of emotional appeal, so we knew it was going to be tough for a jury to understand our side."

CNN.com
United cancels over 100 flights, blames mechanics
December 1, 2000

CHICAGO (AP) -- United Airlines canceled more than 100 flights Thursday for the second straight day in an escalation of operational turmoil it blames on its contract-seeking mechanics. The International Association of Machinists and Aerospace Workers denies responsibility.

The airline attributed 86 of its 106 cancellations by mid-afternoon to maintenance problems -- a percentage that spokesman Joe Hopkins said is "elevated significantly from where we think it should be."

The problems mark a return of major flight disruptions after a better-than-expected performance by United and other airlines over the Thanksgiving holiday period, the busiest travel week of the year.

On Wednesday, United canceled 134 flights, the most in at least a month, and cited maintenance problems for 92 of them.

But after a brief period of relatively normal operations following a settlement with pilots on Aug. 26, the number of cancellations began climbing again a month ago as mechanics' contract talks turned bitter.

The carrier, the country's largest, says the union is defying a November 17 federal court order forbidding an organized work slowdown. The union denies that. The court's preliminary restraining order expires December 13 and the airline plans to seek further legal relief then, Hopkins said.

Machinists' union spokesman Frank Larkin said mechanics had been told repeatedly a slowdown was illegal and not to begin one.

The mechanics' contract expired in July but negotiations remain stalemated. The union says it is waiting for the National Mediation Board to either tell both sides to resume negotiating or declare the talks at an impasse. That would start a 30-day cooling-off period, after which the union legally could strike.

Associated Press
United: Mechanics Stalling Flights
November 15, 2000

Dave Carpenter
AP Business Writer

CHICAGO (AP) -- United Airlines has canceled hundreds of flights so far this month because of what it claims are illegal, concerted job actions by mechanics whose contract negotiations are stalled.

A United spokesman said Wednesday that an average of 4 percent of its 2,300 daily flights have been canceled in November, twice the usual amount -- an increase the carrier blames on mechanics causing jets to be pulled out of service for unneeded repairs and refusing to work overtime.

While the cancellation rate is far short of the chaos that ensnared the world's largest airline last summer during a contract standoff with pilots, it is a troubling development just ahead of the heavy holiday travel period. United is still scrambling to win back customers it lost in the earlier labor turmoil.

The mechanics' union has denied an organized job action is occurring, saying its members have been repeatedly advised not to participate in any such action and even encouraged to work overtime at the employee-owned airline.

Chief operating officer Andy Studdert accused the mechanics of causing the "serious operational problems'' in a letter sent last Friday to Scotty Ford, chief negotiator for the union representing 44,000 United mechanics.

Their "unlawful'' actions, he said, include "submitting an excessive number of mechanical write-ups, making erroneous claims of missing equipment as well as failing to work overtime after they had earlier signed up to do so.''

"This behavior is very disruptive to our operations and is causing significantly increased numbers of delays and canceled flights,'' Studdert said, calling it a "rapidly deteriorating situation.''

As with the pilots, whose refusal to work overtime caused United's packed daily flight schedule to collapse, the mechanics are entitled by federal law governing airline employees to individually turn down the extra work assignments.

Ford fired back an angry letter on Tuesday, saying he resented the airline's "attempt to threaten and intimidate this union and its members during these negotiations.''

"He wants to put them on notice that they have responsibility for the frustration of United employees as they await their new agreement,'' said Frank Larkin, spokesman for the mechanics' union, the International Association of Machinists.

The mechanics, whose contract came up for renewal in July, are seeking raises similar to the average 24 percent wage hikes given pilots. Federally mediated talks are set to resume in Washington on Monday after breaking down twice this month.

"We recognize there's still work to be done,'' United spokesman Chris Brathwaite said Wednesday. "We think that first step will continue on Monday.''

He said the carrier has managed to absorb much of the impact of the mechanics' actions as a result of lessons learned in the pilots' standoff, including increasing the number of spare aircraft to 25 from 12.

United has also trimmed its flight schedule by about 100 flights daily this fall.

Shares of United parent UAL Corp. were down 37.5 cents to close at $37.38 Wednesday on the New York Stock Exchange.

Rocky Mountain News
Let's hear it for our noble United
September 17, 2000

Vincent Carroll

Those of us who have shared the profound pleasure of flying United Airlines during the past few months know what a first-class operation it is. We appreciate the manner in which delays are always reported to passengers the instant they ride into view, and how the airline never, ever misleads a customer as to the likelihood regarding timely takeoff.

We are grateful, truly, for the way United never seriously overbooks its flights. We are gratified, immensely, at how the airline immediately calls in extra counter staff and hang the expense when flights are canceled and hundreds of passengers descend upon frazzled ticket agents to attempt to rebook a flight.

I myself had to wait in line for no more than three or four hours just think of it: They rebooked me within a single afternoon! after my flight from Washington, D.C., to Denver was canceled back in June. And then the airline, as an additional token of its deep esteem, sent me off to a hotel room that boasted nearly enough amenities to have satisfied Mahatma Gandhi during one of his impressive fasts.

What dedicated United fliers admire most about their airline, of course, is the upright honesty and buck-stops-here attitude that characterizes every utterance from its top executives. To be sure, they first tried to blame the weather for the service crisis that enveloped the company in May and eventually resulted in nearly 5,000 canceled flights. And admittedly, CEO James Goodwin waited till August to appear in a TV commercial apologizing for the debacle of the previous months. But those were minor stumbles in an otherwise exemplary record.

Now comes the latest evidence of United's unrivaled devotion to its customers: its announcement last week that beginning next summer it will add nonstop flights from Denver to Frankfurt.

After all, United has insisted for years and no doubt really, truly believed that a nonstop flight from Denver to Frankfurt was out of the question because it didn't own the right sort of planes to make the trip. The airline continued to bleat this refrain after the addition to its fleet of long-distance Boeing 777s, and still resisted a direct Frankfurt flight even after Denver tried to meet its objections by modifying DIA's runways not long ago. Maintaining its good-citizen mode, the airline also tried to dissuade Lufthansa from offering nonstop flights along the same route, only halting its efforts when publicly rebuked by the Denver mayor.

And yet this same airline, realizing that Lufthansa was poised to start its own nonstop Frankfurt-to-Denver flights no matter what United did, generously moved heaven and earth on behalf of its customers to locate planes that could match Lufthansa's service. And what do you know: As luck would have it, United found the planes in its very own fleet. They'd actually been there all the time!

No doubt a few spoilsports will see United's behavior differently. They will accuse the airline of obstructionism and indifference to its customers. They will say the airline exploits a captive market and would prefer to force Coloradans into connections in Chicago, New York or Washington rather than grant them the convenience of a direct flight to central Europe.

They might go so far as to suggest that Coloradans flying to Europe make a point of booking on Lufthansa as a reward for breaking the logjam.

The ingrates. To think they could say such nasty things about such a fine airline and after all United has tried to do for them.

USA Today
Airline on-time performance improves
September 10, 2000

WASHINGTON - The on-time performance of the nation's major airlines improved - a bit - in July. The Department of Transportation reported Friday that 70.3% of flights arrived on time during the month, up from 66.3% in June but still below average. June travel was marred by a series of thunderstorms that disrupted air travel in many areas, and in both months United, the nation's largest carrier, canceled many flights in a dispute with its pilots. United managed just a 41.7% on-time rate in July, down from 48.3% in June, worst among the major airlines for both months. The airline and its pilots reached a tentative agreement Aug. 26. Continental scored the nation's best on-time performance in July at 80.1%. Second was Southwest, 78.5%, followed by Northwest, 77.9%; Delta, 76.1%; and TWA, 74.4%.

Air Transport World
Dis-United
September 2000

Perry Flint

Fans of the ironic cannot help but be amused at the state of labor relations at United Airlines, where pilot leaders are furious at Chairman and CEO James Goodwin over his decision to acquire US Airways Group despite their objections and to do so without a pre-nup that would protect pilot seniority in a merger.

After all, without the support of the pilots and the International Assn. of Machinists, it is unlikely that Goodwin would be in a position to disappoint them. In 1998 they virtually guaranteed his appointment by rejecting then-Chairman Gerald GreenwaldÕs first choice of a successor, former President and COO John Edwardson, who, it was felt, had demonstrated a lack of sympathy for their positions.

Now they are in an awkward position. In one of those odd coincidences that always seems to happen in this business, the pilot contract became amendable shortly before the UAL/US Airways merger was announced. Unhappy with the pace of negotiations and doubly unhappy over the merger, the pilots have been showing their displeasure by refusing overtime, working to rule and generally wreaking havoc on the airlineÕs schedules. Now, according to the airline, they've been joined by the IAM, whose contract also is amendable. Of course these activities are inimical to both groups' interests as investors and also vindicate those who argued that giving unionized employees control of the airline would not make them act like owners.

But to be fair, it is not clear that either group really is an owner as that phrase is understood. For example, it is highly unlikely that Goodwin would have pursued US Airways over the objections of a stockholder controlling 25% of the airline. But the pilots donÕt really "own" their 25% the way a Warren Buffet would. It is held in trust to be distributed upon their retirement. In fact, the pilot union at United may hold the weakest hand of any 25% shareholder in corporate America.

Possibly this aspect of the deal was overlooked in the excitement of creating the ESOP back in 1993-94 when getting rid of Wolf was the main priority, but it certainly has come back to haunt the pilots now. It's a lesson worth remembering, in the US and elsewhere. Air-IndiaÕs pilots are on record as desiring a piece of their airline when it is privatizedÑthey better read the documentation closely to make sure they are represented relative to the size of their investment.

The union disenchantment with United senior management takes on a more significant aspect given the debate in Washington over airline concentration. Right now United has around 18% of the market and its internal problems are causing misery throughout the US airline system. Imagine the disruption that could occur if United represented nearly 25% of the system, as it would after the US Airways acquisition.

Other thoughts arise as well. United is both the largest airline and the largest employee-owned corporation in the world. But employee ownership has not made it more customer-friendly. It ranks at the bottom of the Major network airlines in ontime performance and baggage delivery and it is no better than average in customer complaints, according to US DOT data.

Furthermore, these service shortcomings long predate its current difficulties. For example, United is dead last among ALL Major airlines in ontime performance over the entire 13-year history of DOT recordkeeping. This inability to meet its schedules is particularly stunning given the number of airlines that have held the top spot over the years. Likewise its baggage handling falls far short of its peers, even during times of labor peaceÑit was last in baggage handling in 1997, 1998, 1999 and through the first half of 2000.

Senior executives bristle whenever mention is made of these DOT metrics, but they have yet to come up with an alternative measurement that shows them to better effect.

Given these realities, two things appear obvious: That the less said about the ESOP the better, and that United executives are going to have a tough time selling Washington on the idea that any merger is going to benefit consumers. This has ramifications for the entire industry, which narrowly has avoided reregulation in the past and cannot afford many more "summers of discontent" from its largest member.

Wall Street Journal
UAL Issues Second Profit Warning As Airline Heads Convene for Talks
August 18, 2000

Susan Carey
Staff Reporter, Wall Street Journal

CHICAGO -- In another acknowledgment that it is in the throes of operational turmoil, UAL Corp. issued a second profit warning about its third-quarter results.

The United Airlines parent expects third-quarter profit to be lower than the range of $2.60 to $3.20 a fully distributed share, guidance it gave in mid-July to warn investors down from rosier projections.

But Jim Goodwin, chairman and chief executive, declined Thursday to be more specific, saying uncertainties surrounding labor relations, crew-related issues and weather "preclude us from confidently projecting results at this point for the quarter or the full year."

The move, though widely expected on Wall Street, sent UAL shares down $1, or 2%, to $48.50. The shares' 52-week low is $45.75.

Separately, indicating that some of United's problems are industrywide, Transportation Secretary Rodney Slater has called the chiefs of all the big airlines, along with airport executives and airline union leaders, to a meeting in Washington on Monday to discuss the delays and cancellations that have made this summer a misery for air travelers. Mr. Slater last week came to Chicago and had separate meetings with Mr. Goodwin and the ALPA chief in a bid to persuade them to resolve their dispute.

For UAL, analysts began downgrading earnings estimates last week, citing the high numbers of flight cancellations -- and resulting revenue shortfall -- at the world's largest airline. United has blamed some of its 10,500 pilots for refusing to fly overtime and for making unnecessary sick calls, accusations the pilots union denies. The two sides are in contract negotiations.

After Thursday's profit warning, several analysts revised their estimates.

PaineWebber Inc.'s Sam Buttrick, who last week lowered his forecast to $2.60 a share from $3.35, Thursday came down to $1.90 a share. Julius Maldutis of CIBC World Markets chopped his estimate to $1.40 a share from $2.70. He was at $3.25 a share last week. Salomon Smith Barney's Brian Harris, who had been at $2.95 a share since July, lopped the figure to $2.10.

In 1999's third quarter, on a fully distributed basis, UAL earned $456 million, or $3.75 a share, on revenue of $4.85 billion. Before Thursday's profit warning, the consensus estimate for this year's third-quarter profit by analysts surveyed by First Call/Thomson Financial was $2.75 a fully distributed share.

Mr. Goodwin said booking levels have fallen since early this month, after a particularly bad patch when United was forced to cancel between 180 and 360 flights a day at the last minute, owing to bad weather, mechanical problems, air-traffic control delays and a shortage of pilots.

"While our operating performance has improved somewhat, the reduced booking levels continue and as a result, revenues are not as strong as we had previously anticipated," Mr. Goodwin said.

In recent days, cancellations have fallen to 100 to 135 a day, still outlandishly bad by industry standards. But Thursday, hit by thunderstorms in Chicago, United had scrubbed 230 flights by midafternoon. In the first two weeks of August, United canceled 10% of its nearly 2,400 daily flights at the last minute. Of those that operated, only 36% arrived on time.

To mend fences with its most frequent customers, United Thursday as expected said it will boost the mileage bonuses it awards to three elite-status groups in its Mileage Plus frequent-flier plan. The extra miles will be doled out retroactively from May 1 and for the rest of this year. The company also said it will waive the $75-per-ticket fee for changing travel dates for customers traveling before Sept. 30 whose outbound flights are delayed or canceled. It also will allow customers traveling before that date to postpone their trips without paying that fee.

Contract negotiations with the Air Line Pilots Association continued Thursday at a hotel in suburban Chicago. Only a few significant economic issues remain on the table and the union has said it wants a tentative agreement by Sept. 1.

Daily Breeze.com
Dozens of United mechanics suspended at LAX
August 16, 2000

Ian Gregor

About 100 LAX employees stage 'sickout' to protest lack of contract

Dozens of United Airlines mechanics who work at Los Angeles International Airport have been suspended for staging a sickout to protest their expired employment contract, an airline spokesman said.

About 100 workers called in sick Mon day because they are upset about working without a new contract for a month and are concerned how they will be affected by the proposed merger of United and US Airways, according to one mechanic who spoke on condition of anonymity.

United Airlines managers interviewed the mechanics to determine whether they actually were sick and by Tuesday afternoon had suspended without pay 31 who couldn't substantiate their claims, said airline spokesman Matthew Triaca.

The sickout and suspensions did not result in any flight delays or cancellations, Triaca said.

"There was no impact on operations whatsoever," Triaca said. His assessment was supported by two LAX air traffic controllers.

However, United is requiring other mechanics to work shifts of up to 16 hours to ensure all required maintenance and inspections are completed at the LAX hangar, the unidentified mechanic said.

"Would you want a sleepy mechanic working on your plane?" said the mechanic, who did not want to be identified because he feared he could be fired for revealing information about his company.

Representatives of the mechanics union, the International Association of Machinists and Aerospace Workers Local 1932 could not be reached for comment Tuesday. It was unclear whether the union supported or suggested the sickout.

The sickout is the latest turbulence for an airline, which has been battered by flight delays and labor unrest throughout the summer.

Last week, a Chicago law firm sued the airline on behalf of ticket holders, accusing the carrier of fraud and breach of contract for canceling and delaying thousands of flights. Airline officials declined to comment on the lawsuit.

Additionally, some LAX air traffic controllers say United pilots are protesting their own contract problems by rolling their planes very slowly on taxiways and tarmacs, resulting in airfield backups and delays. Triaca said he had not heard of that tactic.

United mechanics maintain and service 30 to 40 planes a day at the LAX hangar at Century and Avion boulevards, including tire checks, engine oil changes and servicing of systems such as hydraulics, the mechanic said. Airplane overhauls and major repairs are done in San Francisco and Indianapolis, he said.

The sickout began at midnight Monday and continued through the day, he said. About one-third of the company's 300 LAX mechanics called in ill, he said.

The mechanics are upset that their contract expired a month ago, although United had promised seamless labor agreements, he said. They also fear they could lose seniority or be transferred to other cities if United merges with US Airways, he said.

They staged the sickout Monday to coincide with the beginning of the Democratic National Convention and because United CEO James Goodwin was supposed to be in Los Angeles, he said.

While conceding the sickout was illegal, the mechanic said: "How else are we supposed to get our point across?"

Triaca said United tried to get a contract completed on time by starting negotiations several months before the old one expired. Such early negotiations are unusual in the airline industry, he said.

Aviation Week
August 14, 2000

Disgruntled United Airlines mechanics at Dulles International Airport threatened to declare a mechanical on an international Paris flight Friday (August 4, 2000) because Stephen M. Wolf, the controversial former CEO for United (and now, CEO of US Airways) was onboard the aircraft. United Airlines eventually canceled the flight providing passengers with only partial details.

Note: a member of the flight crew from the flight in question recently contacted Untied.com to state that it was the pilots and not the mechanics, who delayed the aircraft.

United flight 914 bound for Paris was scheduled to leave IAD at 17:55 Friday. The flight was initially delayed due to weather. That delay was extended by nearly five hours after mechanics determined Wolf was onboard. Shortly before midnight, United canceled the flight disservicing an estimated 100 passengers.

The mechanics have been responding to the expiration of their union contract with UAL by finding mechanical issues with hundreds of United's planes... grounding them and causing financial disruption for the airline while creating a customer service disaster for United.

This is apparently the first time mechanics have threatened to ground a United flight because of the presence of a specific passenger.

Mid level UAL management officials at IAD reportedly initiated a conference call with headquarters late Friday evening to determine the fate of flight 914 to Paris. The mechanics refused to clear the aircraft's preflight inspection for the sole reason that Wolf was onboard. Mechanics have access to the flight manifest as do baggage handlers insuring passenger positive bag match-up has been completed. This is apparently how the mechanics knew Wolf was onboard.

Shortly before midnight, UAL headquarters officially canceled the flight. Some of the passengers were transferred to United's flight 912 originally scheduled to depart for Paris at 21:35 Friday. That flight was also delayed until the fate of Wolf's flight was determined.

An estimated 100 passengers from the earlier Paris flight were denied boarding on the later Paris flight (UA # 912), due to a lack of seats, and were re-accomodated with meal vouchers and hotels. Some spent the night sleeping on the floor at Dulles, huddled in blankets taken from the aircraft. The travel plans for several of the disserviced passengers will be delayed by several days.

Wolf was among the passengers who had already boarded flight 914 when this most recent job action by the mechanics arose. Many passengers complained about being "stranded" onboard the 777 for hours with no food or drink while the airline provided only sketchy details of what was being called simply a "mechanical delay."

UAL management at Dulles informed customer service agents about the situation but instructed the agents to say nothing about the mechanic's grudge against Wolf, the former CEO. Customer service agents were instructed to only say there was "some sort of mechanical issue" with flight 914 and that passengers were being rebooked on the fastest possible flights to their final destinations. This angered several customer service agents who were required to process the displaced Paris passengers until after 2:30 AM Saturday morning, several hours after their shifts ended.

Wolf was among the passengers rebooked on flight 912 which was scheduled to leave for Paris by 3:00 AM Saturday. It is not known if Wolf, Chairman of US Airways, Inc., was aware that his presence was the cause of the flight disruption.

CNN Travel News
United Airlines sued over canceled flights
August 11, 2000 4:52 PM EDT

CHICAGO (CNN) -- A Chicago-area man filed a class-action lawsuit against United Airlines Friday, claiming his rights were violated when the airline, in the throes of a pilot labor dispute, sold him a ticket last week.

In an 18-page brief filed Friday in Cook County Circuit Court, Kevin Conboy claims United violated the Consumer Fraud Act and Uniform Deceptive Trade Practices Act because it knew, and did not tell consumers, that its negotiations with pilots would probably lead to canceled flights.

Conboy said he was forced to book another flight and rental car to make it to his destination when his August 6 flight was canceled. He said he discovered the cancellation only after he arrived at the airport.

Some United pilots have been declining to work overtime until they receive a new contract, which United says has led to the flight disruptions. Hundreds of flights have been canceled or delayed over the past week as a result.

Conboy wants the airline to reimburse the cost of his lost ticket, plus expenses for alternative transportation. He also wants compensation for other damages including lost frequent flier miles and "missed business opportunities."

Passengers "suffered enormous out-of-pocket expenses, inconvenience, emotional pain and suffering and loss of profits from business appointments that were missed, and shortened vacations planned months or years in advance," the lawsuit states.

Chicago Tribune
United: Flight woes could cost millions
August 10, 2000 6:41 p.m. CDT

Dave Carpenter
The Associated Press

CHICAGO (AP) -- United Airlines is on a pace to lose as much as $150 million in the summer quarter alone from turmoil that has caused a rash of flight delays and thousands of cancellations, the company's president said Thursday.

Rono Dutta apologized earlier this week for the "tremendous nightmare" inflicted on customers of the world's largest airline, which already said it lost $50 million because of labor woes in the second quarter.

Dutta called an analyst's estimate of a pretax loss of $120 million to $150 million in the third quarter -- July through September -- "in the ballpark," according to a company spokesman.

The estimate, issued Wednesday by PaineWebber Inc. airline analyst Sam Buttrick, provided additional pressure on UAL's sinking shares.

The company's stock, which was trading at $79 in January, has slipped steadily and fell another $1.25 to close at $49.875 a share Thursday on the New York Stock Exchange.

The company blames its problems largely on labor strife involving its pilots, who are seeking better pay and work conditions and began rejecting overtime work when their contract came up for renewal in April.

United has since scrambled to trim its schedule, recently cutting 2 percent of its flights for September and October. It says it is hiring enough new pilots to deal with the revised schedule even if they don't work overtime -- a claim the pilots' union vigorously rejects -- and that the current problems stem from periodic sickouts.

"The overtime issue's been dealt with," United spokesman Joe Hopkins said Thursday. "The main issue now, which we experienced over the weekend, is an elevation in sick calls."

United said 133 of its 2,400 scheduled flights Thursday had been canceled by late afternoon, about a quarter of them due to weather. That's a slight improvement over the several hundred called off on recent bad days, but woefully short of industry standards.

So far in August, according to the airline, 13 percent of its flights have been called off.

Hundreds of domestic flights of U.S. airlines are canceled on an average day due to weather, mechanical problems, air traffic control issues and other reasons, but United has been by far the worst performer in recent months.

United and its pilots both say they are making progress toward resolving a months-long contract impasse as a Labor Day target date for settlement approaches. But each side says it's up to the other to bridge the gap.

"It might be down to a few issues, but most of them are big ones," pilot Herb Hunter, a spokesman for United's 10,000-plus union pilots, said Wednesday.

Hunter said he wasn't aware of reported private warnings by pilots to stage serious service disruptions over the Labor Day weekend if no agreement is reached by then.

"We've heard that," said Hopkins, "but obviously something like that would be illegal. It's just part of the economic intimidation that's been going on."

Illinois Attorney General Jim Ryan on Wednesday followed the lead of five members of Congress from Western states in asking the U.S. Transportation Department to investigate United's services and business practices.

U.S. Sen. Dick Durbin, D-Ill., was meeting Thursday with United chairman James Goodwin and the president of the pilots' union to share his concerns about the deadlock and disruptions.

United officials said there has been no significant impact on the airline's international schedule.

CNN: Travel News
United Airlines scraps nearly 2,000 flights
August 8, 2000

CHICAGO (AP) -- United Airlines is canceling nearly 2,000 flights next month, the latest blow as the world's largest airline struggles to improve relations with its pilots.

United will take 1,980 flights off its September schedule, spokesman Chris Braithwaite said Monday. The airline had already canceled 4,800 flights from May through the end of August after pilots announced they would no longer work overtime.

United had the worst on-time arrival rate of major carriers in May, the latest month for which such figures are available. The airline, which canceled more than 240 flights Monday, has also blamed poor weather for some of its woes.

United says its pilots are refusing to work overtime since their contract expired in April and have increasingly been calling in sick. But the pilots say there is no organized work slowdown and problems are more the result of United's failure to hire enough pilots.

More hassles ahead

Travelers can almost bet on more hassles.

"Every time I go to check the board, the time gets later and later," said Paul Sson, who was delayed more than three hours Monday as he waited at O'Hare International Airport in Chicago for a connecting flight to Syracuse, New York.

Debra Spinney has been trying to get from O'Hare to Lexington, Kentucky, since Friday but saw her flight canceled three straight days. She said she won't fly United again.

"I just want to get home and get back to work," Spinney said as she stood in a ticket line Monday.

Analysts said United and the rest of the airline industry this summer are facing record highs for the percentage of seats occupied.

"I think that both the pilots and the company probably bear some responsibility, and the timing could not be worse," said Ron Kuhlmann of Roberts, Roach & Associates in Hayward, California.

The Federal Aviation Administration said delays at O'Hare, a United hub, increased 23 percent last month compared with July 1999, and delays nationwide were up 16.5 percent in June from the same month last year.

Pilot shortage

United pilot Herb Hunter, a spokesman for the pilots' union, said some pilots have refused to work overtime but there is no organized effort by the union.

"If we settled this contract today we're still short of pilots," he said. "They didn't hire enough people, and we told them over a year ago that we're going to be short this summer."

United spokesman Joe Hopkins said the airline is in the process of hiring 1,300 new pilots. Earlier this year, the airline reduced its overall schedule by 2 percent to deal with the overtime issue.

Now more pilots are calling in sick, Hopkins said.

"That has hurt us, and we've obviously had weather problems," he said. "We're well aware of our service levels and that there is frustration with our customers."

Further souring relations is United's proposed $11.6 billion merger with US Airways. Union leaders oppose the deal, largely out of concern that United's 10,500 pilots will lose seniority to US Airways' 6,000 pilots.

The two sides are negotiating salary, benefits and work rules with the help of federal mediators and hope to have a contract agreement by Labor Day. A strike probably isn't imminent, but the union has activated its strike preparation committee just in case.

"It's been a difficult challenge all summer long, but we will get through it," Hopkins said. "We'll get a new contract and things will return to normal."

San Francisco Chronicle
Passengers Frustrated With United 43 flights canceled yesterday at SFO
Tuesday, August 8, 2000

Verne Kopytoff, Chronicle Staff Writer

San Francisco -- At the peak of the busy summer travel season, United Airlines passengers encountered a frustrating array of flight delays and cancellations in San Francisco yesterday in what has become a chronic problem for the Bay Area's dominant air carrier.

At least 43 United flights in and out of San Francisco were canceled yesterday and nearly half the remaining afternoon flights were running late.

The airline's troubles stem from a convergence of union disputes, bad weather and crowded skies.

This weekend was a particularly difficult one for United's passengers when thunderstorms in Chicago created a ripple effect of flight tardiness that reached the Bay Area. Fog in San Francisco yesterday compounded the problems for local travelers.

Many passengers waiting at the airport yesterday were coping with delays of nearly three and four hours by reading, taking walks through the terminal and quietly fuming. Others had to rebook flights that had been canceled.

``We'll never fly United again,'' said Mary Lin Haddock. Her flight back home to the Orlando area was delayed more than an hour, although she was told it would be only 20 minutes late when she telephoned before coming to the airport.

Haddock was already on edge about United after her flight here on Friday was canceled because of the airline's labor dispute, in which pilots are refusing to work overtime because their contract has expired. She complained that United neglected to warn her with a telephone call about the cancellation and then compensated her with only a $6 voucher to spend on breakfast while she waited for another plane.

Haddock said that because of the delay, she was unable to visit Alcatraz and North Beach. She said that had she known that she was going to spend so much time in an airport, she would have stayed at home.

United's labor troubles began in April after the company's pilots contract expired without a new one being approved. In reaction, many of United's pilots refused to work overtime, leading to scheduling problems that continue today.

In July, United's maintenance workers contract also expired. Since then, many mechanics have refused to work overtime, nearly doubling the number of grounded planes.

Negotiations between United and its pilots union are in progress. Discussions are focusing on pay, working conditions, job protection and retirement insurance, according to Herb Hunter, a pilots union spokesman.

``We're making progress, but I can't say that I'm optimistic,'' Hunter said.

Matt Priaca, a spokesman for United, said his company hopes to reach an agreement with its unions within the next three or four weeks. He characterized the negotiations as ``very positive.''

Anticipating scheduling problems, United canceled 2 percent of all its flights from May through September. The decision is costing the company an estimated $50 million in revenue.

Yesterday, flight schedule monitors in United's San Francisco terminal made no mention of the labor dispute when explaining the delays and cancellations. Instead, they blamed the situation on runway restrictions caused by fog and low clouds.

Even without labor disputes, San Francisco's airport is notorious for flight delays and cancellations. It is consistently among the nation's worst in both categories, primarily because of bad weather.

United's recent record is equally troubled. In May, it ranked last among all airlines in on-time performance and cancellations.

Many travelers seemed braced for the wait yesterday with books to read and flexible schedules. That did not appear to make the delays any more palatable, however. Bernadette Patten, a dance teacher from Houston, was waiting for her flight back home, which was three hours late. She complained about having to get up 7 a.m. to get to the airport, only to find out that she could have slept much later.

She and her daughter, Carolyn, 12, had already read the magazines they bought to pass the time and ate what they called a surprisingly good lunch. But, like many people at the airport yesterday, they were bored and uncomfortable.

``I'm very angry,'' Patten said. ``This would make me think twice about flying on United.''

MSNBC News
Cautionary words to summer fliers
Spare yourself distress by heeding two simple warnings
July 23, 2000

By Rudy Maxa

July 23 - Fliers beware. Something strange is happening at United Airlines - sudden mechanical difficulties, empty seats on "full" flights, vanishing luggage. Unrelated but just as mysterious: the baggage disappearing act at Amsterdam's Schiphol airport. Discover some tips for coping with air travel this summer.

IMAGINE MY SURPRISE the other day. I was in Munich's airport awaiting the noon departure of an SAS flight to Copenhagen. At 11:30, the plane began boarding. Every seat was taken, but right at noon, we pushed away from the gate. As I said, you can imagine my surprise - it's been a while since that happened in the United States.

June statistics reveal a dismal track record by U.S. airlines. There were 48,905 flights delayed 15 minutes or more in June, up 18 percent from the same period a year earlier, according to the FAA.

But I think the truth is even worse. If you're traveling this summer, I have two words of caution: United and Amsterdam. They're unrelated problems, but they're both big enough to warrant a column.

CAN YOU COUNT ON UNITED?

First, United. Many United Airline pilots are refusing to work overtime, snarling schedules way beyond what passengers ought to reasonably expect. But I don't think the awful truth has sunk in yet.

Unlike the American Airline pilot work action of last year, when suddenly lots of pilots got "sick," the United affair has been more low key and so has received much less publicity. Because American's problem was so obvious, passengers knew to avoid the airline, and American sought and received legal relief fairly promptly.

The United work action - random and not organized according to the pilots' union - has snarled the airline's operations to the point that United is now canceling one out of 11 flights. Not all of that is due to the pilots' action - weather is always a bugaboo in the summer. But there are enough pilot-related delays to cause concern if you're flying United. In May, only 57 percent of United's flights arrived on time (which means within 15 minutes of its scheduled time) - the worst record of any of its competitors.

I don't expect June's numbers to be much better. Last month, I spent six hours in Los Angeles, for example, waiting for United to cobble together a crew sufficient to fly a jet to Paris.

"MECHANICAL DIFFICULTY'

More recently, on a Friday night, July 14, at Washington's Dulles airport, the airline canceled several flights to Europe. "Mechanical difficulty" was the reason given to passengers, but as one United employee said to me that night, "Come on - you think three 777s all had mechanical difficulty the same night?" Weather eventually became a factor but long after the flights were scheduled to depart.

Feeling like Bill Murray's character in the movie "Groundhog Day," I returned to Dulles late the next afternoon to try my luck a second time. Once again, one European flight was canceled, and several others were "on hold." Passengers were told that the "situation would be updated" two hours after the scheduled departure times.

To make matters worse, most flights were flying nearly full as has been the case nearly everywhere this summer. Remember all those travelers - several jumbo jets worth - who'd gotten bumped the night before? We were all jostling for seats, too, on crowded planes with uncertain departure times. Anyone hoping to make a connection in Europe was already doomed.

FIND A PLANE, ANY PLANE

I was headed to Copenhagen via Frankfurt when I was thwarted Friday night; knowing that same flight would have few seats available the next night, I'd booked a seat via Amsterdam. It made no difference - both flights were on indefinite delay when I arrived at Dulles in my second attempt to cross the Atlantic.

At United's Red Carpet Club, I heard the flight to Munich was departing on time, but there were no seats available in any class of service.

Maybe it was the desperation in my eyes, but I snared a ticket on the Munich flight when I leaned in close to the agent behind the service desk and said very quietly but firmly, "I've been trying to get overseas for 24 hours now - put me on any plane to Europe."

Incidentally, there were empty seats in coach - including one next to me - and I felt sorry for fellow customers who had been told the flight was full. And that was after waiting more than an hour past the scheduled departure time to accommodate the 40 United passengers arriving late from another flight. By Monday afternoon, the bag I'd checked on Friday night at Dulles caught up with me in Copenhagen.

Section clipped

WHAT TO DO?

If you absolutely, positively have to go somewhere by plane, think twice about flying United these days. Or leave a day early so you have plenty of time to handle a disaster. You simply can't count on the airline to take off and land on time.

Rest of article clipped

Rocky Mountain News
DIA travelers are getting a bumpy ride this summer
Record traffic, foul weather, labor troubles cause delays that have stranded thousands
July 14, 2000

By Richard Williamson
Denver Rocky Mountain News Staff Writer

Record traffic, stormy weather, labor disputes and thousands of canceled flights are causing unprecedented problems for passengers and airline employees at Denver International Airport.

And there are few answers in sight with Denver's heaviest air travel month just three weeks away.

Tempers are wearing thin as passengers and airline employees struggle to cope with the chaos. Exhausted customer service agents, some earning $8 an hour at United Airlines, say they are forced to keep working overtime to handle streams of passengers who have missed connections or been stranded because of canceled flights.

"A lot of people feel we've been chewed up and spit out," said a United Airlines customer service agent who would speak only on condition of anonymity. "When the agents are yelled at constantly, you just can't take it anymore. You get to your breaking point and you snap back."

Even first-class passengers with Premier Mileage status say they have been left stranded with no information from agents who often are new to the job.

"This place has little to no customer service," said Lisa Prahl, a clinical social worker whose flight to Sacramento was delayed, then canceled after passengers were told they had eight minutes to board.

Grayson Gilbert, a passenger from Fort Pierce, Fla., was told when his plane landed in Denver that he would have to "run like hell" to catch the connecting flight 29 gates away on Concourse B.

"That's too far to run like hell," he said.

With traffic outrunning last year's record pace, passengers are finding full parking lots at DIA and confusion about their flights.

The cause of the problems depend on whom you talk to:

United pilots, sometimes accused of contributing to the problems by refusing to fly overtime during contract negotiations, say they warned the company a year ago that there was inadequate staff to cover this summer's schedule.

"There's a lot more wrong with this airline than pilots not flying overtime," said Capt. Herb Hunter, spokesman for the United Master Executive Council of the Airline Pilots Association. "This is a huge power curve and they're behind it. There's a lack of trust in where the company is going. They're several hundred pilots short and there's no way around it."

United spokesman Kurt Ebenhoch said overtime flying has been built into the schedule at pilots request since employees bought the airline in 1994. When pilots quit flying overtime, the airline eliminated 1 percent to 2 percent of its flights through the summer, despite record demand.

Stranded passengers have found no room at the inn.

With hotels full this week, passengers have been left to fend for themselves. On Wednesday night, dozens of stranded passengers were unable to find rooms. This summer, Denver-area hotels are running 80 percent full, compared with 60 to 65 percent in the winter. Airline policies cover hotel rooms if the airline had control over the situation that caused the passenger to miss the flight. Weather and air traffic control problems are not under airlines' control.

"My personal view is that airlines have to take a more aggressive position and go out and find hotel rooms, even if they can't find them downtown," said hotel consultant John Montgomery of Horwath Horizon Hospitality.

The truth is not out there, passengers say.

Customer service agents have been told days ahead of canceled flights to blame delays on weather and crew shortages.

"How are you supposed to tell people it's weather-related when it hasn't happened?" one agent asked. "I want to tell people the truth."

Ebenhoch said weather at other airports can affect Denver flights. When Denver ground crews were called inside Wednesday for an hour because of lightning strikes, flights bound for Denver had to hold at their airports.

"We know from the report of the inspector general of the Department of Transportation that they are not being totally honest," David Stempler, president of the Air Travelers Association, said of the major carriers. "And some of that information is not being transmitted to people on the front lines."

Weather this summer has been a nightmare for all airlines, throwing schedules off for days.

One day in June, a storm system with cloud tops as high as 55,000 feet bisected the Midwest from Canada to the Gulf of Mexico, basically blocking all east-west travel, Ebenhoch said.

Pilots agree this has been one of the worst summers in memory for flying. Wednesday's lightning alert in Denver threw the entire day's schedule off.

Labor relations are poor, with the end of the employee stock ownerhship plan and negotiations to increase pay to levels equal to those at other major carriers, union leaders say.

United's plan to merge with US Airways, headed by the unpopular former United Chief Executive Stephen Wolf, has made things worse, they say.

"He's making more off us this time than when he worked for us," pilots union spokesman Hunter said. Support for United Chief Executive Jim Goodwin, handpicked by the unions, is also eroding, he said.

Ebenhoch says that United is negotiating in good faith and hopes to reach a contract agreement as soon as possible. But former Chief Executive Gerald Greenwald's goal of "10 years of labor peace" appears in jeopardy.

DIA officials say they are not pointing fingers at United and accept whatever figures the airline offers on canceled flights.

Ebenhoch said United canceled eight of 321 flights Thursday. That still accounts for at least 1,000 passengers if the smallest planes were booked full.

"We had another good operating day," he said.

Most of the 50 flights DIA said were canceled Wednesday were United Express flights, flown by subcontractors Great Lakes Aviation and Air Wisconsin.

Wall Street Journal
Bad Weather and Crew Shortage Cause Cancellations on United
May 12, 2000

Susan Carey
Staff Reporter, Wall Street Journal

CHICAGO -- UAL Corp.'s United Airlines said it canceled about 300 of its 2,400 flights Thursday, half because of stormy weather in Chicago and half because some pilots are choosing not to fly overtime, resulting in a crew shortage.

The company and the Air Line Pilots Association, which represents 10,000 United pilots, are in contract talks to reach a new bargaining agreement to supersede the one that came open for renewal on April 12. While it is commonplace in the airline industry for such talks to stretch for months or years after the renewal date, the rhetoric has been heating up on both sides in recent weeks.

A United spokesman said Thursday that the crew shortage became evident starting April 12, especially among pilots who fly its Shuttle by United shorthaul jet service on the West Coast. A shortfall in pilots bidding for "open flying," essentially overtime, has gotten worse in the past week, the spokesman said. Thursday, 150 flights were canceled because of a lack of cockpit crews.

He declined to say whether the shortfall is a result of tensions arising from contract negotiations.

In a telephone message to members on Wednesday night, ALPA said it "strongly objects" to "derogatory comments" being made by some United customer-service and reservations agents. The union said certain workers in public-address announcements and in telephone calls have blamed the pilots for a series of flight cancellations and delays.

The message noted that ALPA for months has been warning United that a pilot shortage was imminent as a result of the company's "insufficient manpower planning" and "inability to properly staff and manage the airline." Now with summer approaching and traffic high, "the problem is likely to get worse," the message said.

United said the problem generally affects fewer than 100 of its 2,400 daily flights. United said it is "fine tuning" its schedule and canceling flights up to a week in advance of the departure date so that customers can be contacted and placed on other flights. The cancellation Thursday of three times that number of flights was exacerbated by stormy weather in Chicago and along the East Coast, the airline said.

Continental Airlines News Release
April 24, 2000
Continental Airlines Files Federal Antitrust Lawsuit against United Airlines and Airline Management Council over Baggage Sizers
Seeks injunction and treble damages, citing multi-carrier conspiracy to limit competition

DULLES INTERNATIONAL AIRPORT, Va., April 24, 2000 -- Continental Airlines, Inc. today is filing a federal antitrust lawsuit against United Airlines and the Airline Management Council at Washington Dulles International Airport to stop anticompetitive practices and illegal interference caused by newly-installed baggage-sizing templates at the shared X-ray security screening checkpoints.

Continental competes with United and other airlines by offering bigger overhead bins and more closet space for carry-ons, and friendlier carry-on policies, each of which are compromised by United's baggage sizer templates.

The lawsuit states that United has conspired with other airlines under the auspices of the Airline Management Council to limit competition by requiring all airlines' customers to conform to a single, restrictive standard for carry-on baggage. Continental and co-plaintiff Continental Express, Inc. also allege that the baggage sizers interfere with the purpose and intent of federally required security screening.

"In their quest to prevent customers from carrying their bags on-board, airlines like United are thwarting our ability to compete on the basis of offering a superior product that accommodates a broader range of travelers' needs," said a Continental spokesperson. "Continental refuses to participate in an anti-consumer and anticompetitive practice that is detrimental to travelers. Our customers should not be penalized because other airlines offer poor service or unfriendly carry-on baggage policies."

United Airlines led the conspiracy among airlines who voted in favor of installing sizers at Dulles, preventing Continental and other carriers from competing for customers by offering more customer-friendly carry-on policies.

"United has even created an 'allocation' for each airline, through a medallion mechanism, to limit the number of customers who are permitted to avoid the restrictions of the bag sizing template. This smacks of good ol' boy agreements made in a smoke-filled room," the spokesperson said.

Business Week
April 10, 2000
Employee Ownership Isn't Buying Labor Peace at United Airlines

Talks between the pilots and parent UAL are heading for arbitration, dashing the ESOP's promise
Michael Arndt
Chicago

Six years ago, United Airlines pilots teamed up with other employees to buy control of the carrier in the biggest employee stock ownership plan in the U.S. But now they're finding out they didn't get one key thing in their deal with parent UAL Corp. -- a friendly face across the bargaining table.

United's current contract with 9,900 members of the Air Line Pilots Assn. expires Apr. 12. Before labor talks began in January, both sides spoke about reaching a quick, effortless, "seamless" agreement, with the new contract taking effect just as the old one and the old ESOP ended. And why not? Frederick C. Dubinsky, chairman of ALPA's United chapter, rubs elbows on the company's board with UAL Chairman and Chief Executive James E. Goodwin.

But as negotiations have sputtered along with only a two face-to-face sessions since late March, both sides have given up any hope of meeting their deadline. Instead, they now plan to fly Dubinsky and Goodwin to Washington as soon as Apr. 14 to jointly request federal mediation.

"CRUNCH TIME." The failure is no cause for immediate alarm. Mediation can go on indefinitely with pilots on the job. And under federal labor law governing airlines, pilots could strike only if the mediator declares an impasse and the mandatory 30-day cooling-off period goes by without a breakthrough.

"Next year is the crunch time," says Brian Harris, an airline analyst with Salomon Smith Barney. But the fact that United and its pilots can't reach a settlement on their own shows that the ESOP hasn't fundamentally improved management-labor relations after all. Despite United's unique ownership structure, notes Harris: "It's an airline like the others -- no better, no worse."

The breakdown also is ominous for United's negotiations with the International Association of Machinists, which represents almost 50,000 mechanics, baggage handlers, and reservations and gate agents. Their contract concludes on July 12. Bargaining teams have been meeting Mondays through Thursdays near United's headquarters in suburban Chicago, and union representatives say they've been making progress. But they haven't yet taken up the big issue that bollixed talks between the airline and the pilots -- pay.

FALLING BEHIND. Under United's current pact with ALPA and the IAM, wages are set to snap back this year to 1994 levels, fully restoring pay and benefits that employees gave up in exchange for a 55% stake in UAL and two seats on the 12-member board. For pilots, that means a 6.7% raise Apr. 12, capping two 5% hikes in the 1990s.

But over the last six years, while United employees were working for reduced pay, salaries at other carriers have increased, so that today many of their pay scales are ahead of United's. Negotiators for the pilots like to point to one extreme example: Boeing 777 captains at Delta Air Lines now get $65 to $70 an hour -- more than United 777 captains. Management has promised to make United's pay "competitive" with that of industry peers American, Delta, and Northwest Airlines. To that end, the company has offered pilots an additional 3% pay bump. But as employees of the world's biggest airline, United pilots are demanding salaries that will be the greatest. Will 3% more do it? Not even close, says Herb Hunter, an ALPA spokesman.

Members of the IAM also insist they deserve more. Ramp workers at US Airways are paid as much as $22 an hour, while United wages top out at $19 an hour, notes union spokesman Frank Larkin. To achieve parity, United would h