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United Bankruptcy Not Affecting Travelers Yet

Aired December 09, 2002 - 11:44   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LEON HARRIS, CNN ANCHOR: Monday mornings aren't always fun anyway, but this one has been a particularly tough Monday for United Airlines. As we told you earlier, the world's second largest airline has filed for bankruptcy protection, and this should have no immediate effect on flights, but that is very little consolation for many travelers.
Jen Rogers of our financial news unit joins us now from United's San Francisco hub to get some more on this -- good morning, Jen.

JEN ROGERS, CNN FINANCIAL CORRESPONDENT: Good morning, Leon. Well, San Francisco International is United's third largest hub behind Chicago and behind Denver, and it accounts for more than half of the traffic here. So it just dominates this airport, and really, if you live in the Bay area, chances are pretty good that you fly United. And those are the people this morning that have the most questions, people that are loyal to United because those sort of casual flyers that switch from one airline to another, if something happened to United, they could just switch airlines. But people that have been stockpiling miles with United, well, they are trying to figure out what are going to happen to those.

Well, at this point, the company coming out and saying the Mileage Plus program will be sticking around. Changes are definitely expected, but at this point, the company is still trying to figure it all out. So far, they are calling it business as usual, and saying they have the money to make it through Chapter 11.

(BEGIN VIDEO CLIP)

LARRY DE SHON, UAL AIRPORT OPERATIONS: We have plenty of money to continue operations, so there's no need to worry about that. Our customers can book with confidence, we will continue to honor our frequent flyer program, we will honor all of our tickets, and they should have, really, no doubt about that at all.

(END VIDEO CLIP)

ROGERS: So, when can you expect some changes? Well, Chapter 11 is a very cumbersome process. There are a lot of hoops to jump through. United can no longer be making all these decisions on their own. They need to make them in concert with their creditors, they need to make them with the approval of a bankruptcy judge.

So they say they are studying the issues of layoffs, possible layoffs, possible service cut backs, and we'll have that news in the future. For now, they're saying changes not expected with the Red Carpet Clubs. They are still a member of the Star Alliance. The refund policy is still in effect, and Leon, they say, of course, safety is still their number one priority.

HARRIS: All right. But you know something, Jen, this story has been in the headlines for the past week or so, and it struck me that this kind of a headline, an airliner being in bankruptcy court, is something that we've seen over and over again over the past couple of decades in the news. Is the the sense there that -- the folks that you're talking with, that the flying public will just take this in stride because of that?

ROGERS: Certainly, I think in talking to people, they see this more as a formality. I mean, this is a very big deal for United's employees and for their creditors, but for the traveling public, they see U.S. Airways already operating in Chapter 11. They have seen Continental emerge, TWA, America West, other brand names that have gone into this. And so, to them, it is just a reality of the airline environment these days.

HARRIS: You got it. Jen Rogers in San Francisco, appreciate it.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com






Aired December 9, 2002 - 11:44   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Monday mornings aren't always fun anyway, but this one has been a particularly tough Monday for United Airlines. As we told you earlier, the world's second largest airline has filed for bankruptcy protection, and this should have no immediate effect on flights, but that is very little consolation for many travelers.
Jen Rogers of our financial news unit joins us now from United's San Francisco hub to get some more on this -- good morning, Jen.

JEN ROGERS, CNN FINANCIAL CORRESPONDENT: Good morning, Leon. Well, San Francisco International is United's third largest hub behind Chicago and behind Denver, and it accounts for more than half of the traffic here. So it just dominates this airport, and really, if you live in the Bay area, chances are pretty good that you fly United. And those are the people this morning that have the most questions, people that are loyal to United because those sort of casual flyers that switch from one airline to another, if something happened to United, they could just switch airlines. But people that have been stockpiling miles with United, well, they are trying to figure out what are going to happen to those.

Well, at this point, the company coming out and saying the Mileage Plus program will be sticking around. Changes are definitely expected, but at this point, the company is still trying to figure it all out. So far, they are calling it business as usual, and saying they have the money to make it through Chapter 11.

(BEGIN VIDEO CLIP)

LARRY DE SHON, UAL AIRPORT OPERATIONS: We have plenty of money to continue operations, so there's no need to worry about that. Our customers can book with confidence, we will continue to honor our frequent flyer program, we will honor all of our tickets, and they should have, really, no doubt about that at all.

(END VIDEO CLIP)

ROGERS: So, when can you expect some changes? Well, Chapter 11 is a very cumbersome process. There are a lot of hoops to jump through. United can no longer be making all these decisions on their own. They need to make them in concert with their creditors, they need to make them with the approval of a bankruptcy judge.

So they say they are studying the issues of layoffs, possible layoffs, possible service cut backs, and we'll have that news in the future. For now, they're saying changes not expected with the Red Carpet Clubs. They are still a member of the Star Alliance. The refund policy is still in effect, and Leon, they say, of course, safety is still their number one priority.

HARRIS: All right. But you know something, Jen, this story has been in the headlines for the past week or so, and it struck me that this kind of a headline, an airliner being in bankruptcy court, is something that we've seen over and over again over the past couple of decades in the news. Is the the sense there that -- the folks that you're talking with, that the flying public will just take this in stride because of that?

ROGERS: Certainly, I think in talking to people, they see this more as a formality. I mean, this is a very big deal for United's employees and for their creditors, but for the traveling public, they see U.S. Airways already operating in Chapter 11. They have seen Continental emerge, TWA, America West, other brand names that have gone into this. And so, to them, it is just a reality of the airline environment these days.

HARRIS: You got it. Jen Rogers in San Francisco, appreciate it.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com