Advertisement - Click to support our sponsors.


Starbulletin.com


Thursday, August 10, 2000


UAL


United woes could
cost airline $150 mil


Associated Press

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

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 today 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 $49.88 a share today 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 today. "The main issue now, which we experienced over the weekend, is an elevation in sick calls."

United said 100 of its 2,400 scheduled flights today had been canceled by midmorning, 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.

(As of midmorning, the airline's schedule of 18 daily mainland-Hawaii flights was running smoothly.)

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 is 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 was not 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 yesterday 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 today 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.



E-mail to Business Editor


Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
[Feedback]



© 2000 Honolulu Star-Bulletin
https://archives.starbulletin.com