As sharp pay cuts were extracted last week from the employees of United Airlines, workers, shareholders and creditors still are waiting for the carrier's vision for emerging from bankruptcy.þþSo far, United's moves--including cutting fares and attempting to relaunch a failed discount operation on the West Coast--are considered tired ideas in the commercial aviation industry.þþIt's time, critics say, for United Chief Executive Glenn Tilton and his management team to articulate where they plan to take the nation's second-largest airline.þþFor United's union workers, who have taken temporary pay cuts of up to 29 percent, the frustration is mounting.þþÿUnited management has been less than forthcoming with the information necessary for our full participation in the airline's restructuring,ÿ said Greg Davidowitch, president of the United unit of the Association of Flight Attendants.þþThe carrier has ÿto provide us with access to the information we need and with a clear plan and reasons for the changes they are requesting going forward,ÿ Davidowitch said.þþTo be fair, Tilton hasn't been in the top job for long. The former Texaco Corp. chairman became United's CEO in September, three months before the carrier filed for bankruptcy. He's also the third chief executive to lead United since October 2001.þþLast week's temporary pay-cut agreements with United's unions were an important step in helping United stabilize its costs. The airline is seeking $2.4 billion in annual labor savings.þþBut United's time to formulate a plan is quickly slipping away. Under the U.S. Bankruptcy Code, the airline has 120 days from filing to submit a reorganization plan. After that, creditors can present their own plans.þþCritics say Tilton has wasted valuable time that should have been spent formulating a plan.þþInstead of focusing on saving the airline, they say, he spent his first 90 days on the job backing an application for a $1.8 billion federal loan guarantee that had little chance of being approved.þþAnd rather than restructuring United's day-to-day activities, he has supported efforts to repair operations, including its expensive hub business, that should have been changed--or abandoned--years ago.þþConcern mountingþþRobert Mann, president of RW Mann & Co., an airline consulting firm that is advising some of United's creditors and suppliers, said his clients are becoming increasingly concerned about the lack of information.þþÿThe Day 1 stand-ups in front of the microphones were a good start,ÿ said Mann, ÿbut there has been no energy put into maintaining that momentum.þþÿOther than occasionally poking some constituent group, there's been no information. The message that they are taking back from this is, `The beatings will stop when morale improves.'ÿþþInstead of crafting a solid strategy, Mann said, ÿTilton has gone back into the bunker and huddledÿ with his consultants to prepare a plan.þþUnited has hired a management consultant, McKinsey & Co., and two restructuring consultants, one of which is to receive a fee of $15 million in addition to monthly charges. The airline has said it expects to spend more than $1.2 million a month for consulting services.þþElk Grove Township-based United said it is not ready to disclose more details at this time.þþÿWe're not going to give away all the trade secrets,ÿ said Chris Brathwaite, a spokesman for the carrier. ÿWe are in a competitive business.þþÿWe are going to be leaner and smarter about where we fly, and we will be utilizing more regional jets. Now that we are getting a handle on our costs, we are becoming an airline he [Tilton] wants us to be.ÿþþUnited is particularly vulnerable financially because it faces competition from low-cost carriers such as Southwest Airlines or JetBlue Airways on 72 percent of its routes.þþBut Brathwaite said United is heading in the right direction.þþIn a statement Friday, the airline said it is putting together a long-term business plan ÿthrough 2007 and beyond that will keep the United brand relevant to the entire market.ÿþþUnited said it is ÿlooking at a new cost-competitive mainline product. And we intend to create a new product targeted at leisure and price-conscious business customers. And we are exploring the expanded use of regional jets as part of our United Express partnerships.ÿþþThe new, low-cost operation appears to be similar to one that Delta Air Lines is preparing to launch using 198-passenger planes to replace Delta Express, a low-cost operation that flew 130-passenger jets.þþ`More of the same'þþJoe Brancatelli, an air travel consultant, is especially critical of Tilton's first four months in charge.þþÿTilton is now part of the problem,ÿ Brancatelli said. ÿHe has had 120 days to say `Throw it out.' Now he is part of the old United.þþÿHe has not said this thing is broke. His solution is, `Let's do more of the same.' Instead, he says, `We are going to be a kinder, gentler failure.'þþÿHow many more decades do we go watching Southwest and JetBlue eat their market share before they admit that their model doesn't work?ÿþþ
Source: Chicago Tribune
