United flying in friendlier skies
By Dave Carpenter
AP Business Writer
CHICAGO — United Airlines CEO Glenn Tilton said yesterday that the carrier intends to spend nearly $4 billion on improvements in the next five years and reiterated interest in a merger.
Tilton, who also is chairman and chief executive of parent UAL Corp., said in a message to United employees that the nation's No. 2 airline has drawn up more than 250 initiatives as part of a five-year plan.
He did not disclose specifics but said the spending will support improvements for both customers and employees and is aimed at producing revenue and efficiency improvements.
The ambitious goals come after a third quarter in which Tilton said United is expected to have produced one of the best revenue showings in the industry. U.S. airlines report quarterly results later this month.
"The results we are posting across our company have enabled us to look to our future and create a five-year plan that will position us for success in an industry that has historically and consistently destroyed value for shareholders and stakeholders," he said in the recorded message, which the company released to the media.
"The ambition of our five-year plan is to position United to be the global airline of choice for premium customers, employees and investors, maintaining our fundamental commitment to safety and balancing the needs of all of our stakeholders."
The company has been reported to be considering the sale of most of its maintenance operations and its frequent-flier program in order to raise cash — possibilities that Tilton essentially confirmed.
"In addition to strengthening the performance of the airline, our plan also includes unlocking the value of business units such as United Services and Mileage Plus, and contemplates the eventual consolidation of the industry and United's role in that process," he said.
UAL reported its most profitable quarter in seven years in the second quarter, a $274 million gain that reflected increased capacity on international routes as well as fuller U.S. flights and lower costs. But that modest profit pales in comparison to the more than $10 billion that it lost over six years.
