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CNN Live Today
United Airlines Files for Chapter 11 Protection
Aired December 09, 2002 - 10:04 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: Now United Airlines is entering a new chapter today in its 71-year history, Chapter 11. The airline made the long anticipated filing this morning in federal bankruptcy court in Chicago.
And Ceci Rodgers of our Financial News unit joins us now from United's hub at Chicago's O'Hare Airport with what this is going to mean to the airline's cloudy future.
Morning -- Ceci.
CECI RODGERS, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Leon.
Well, United falling victim to the brutal aftermath of the September 11 hijackings, a prolonged economic slump and its own high- cost structure. Today, the chairman of the company coming to this terminal, United's terminal at O'Hare Airport, and telling employees that it's chapter one for them, for the airline, pinning a very positive note and trying to encourage everyone that this airline will come out successfully from bankruptcy protection.
It was very emotional, as you can see, employees who own 55 percent of the airline really very emotional on this day of Chapter 11 because they had worked very hard to try to come up with enough wage concessions to satisfy the government, which turned down United's $1.8 billion federal loan guaranty application last week and made this pretty much a necessity.
And here's what Tilton had to say about what the airline is going to do next.
(BEGIN VIDEO CLIP)
GLENN TILTON, CEO, UNITED AIRLINES: We're going to look at the entire business, really soup to nuts, everything. We're going to examine every element of the business. We have been doing so for the past few months, and that includes every component of the margin, from labor costs to non-labor costs, to revenue realization and to profit improvement initiatives. All of those things need to be considered to dramatically improve our margin, which, obviously, since we are now in a cash negative position, is insufficient. So we're going to examine everything.
(END VIDEO CLIP)
RODGERS: And obviously the entire airline industry is going through this kind of massive restructuring in this new economic environment and post-9/11. One of the things Mr. Tilton said is that this airline has to broaden its customer base.
And here to talk with us a little bit about how it might do that is Herb Hunter. He is the spokesperson for the United pilots.
Thanks for joining us -- Herb.
HERB HUNTER, PILOTS SPOKESPERSON, UNITED AIRLINES: Hi -- Ceci.
RODGERS: So how do you feel today after this Chapter 11 filing?
HUNTER: Well it's depressing and tragic in that all of the employees here at United Airlines pulled together behind Mr. Tilton and we had a plan that we believe in our hearts would have worked. The ATSB didn't see it that way. Ironically, in your opening statement, you addressed the September 11 tragedy and the aftermath. And you know when that loan program came about, who else other than an aircraft or an air carrier that lost two aircraft to assassination of its crews would have qualified, but the people who control it didn't see it that way.
RODGERS: So, obviously, still a very emotional issue. Thanks for joining us. We have to wrap.
HUNTER: Right. Thank you.
RODGERS: And we'll take -- send it back to you. But needless to say, this is a -- this is a very emotional day for the employees, but the passengers see very little difference, if any, in this airline after the Chapter 11 filing -- Leon.
HARRIS: Ceci Rodgers in Chicago at O'Hare Airport. Thanks, Ceci, we'll see you soon.
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 - 10:04 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Now United Airlines is entering a new chapter today in its 71-year history, Chapter 11. The airline made the long anticipated filing this morning in federal bankruptcy court in Chicago.
And Ceci Rodgers of our Financial News unit joins us now from United's hub at Chicago's O'Hare Airport with what this is going to mean to the airline's cloudy future.
Morning -- Ceci.
CECI RODGERS, CNN FINANCIAL NEWS CORRESPONDENT: Good morning, Leon.
Well, United falling victim to the brutal aftermath of the September 11 hijackings, a prolonged economic slump and its own high- cost structure. Today, the chairman of the company coming to this terminal, United's terminal at O'Hare Airport, and telling employees that it's chapter one for them, for the airline, pinning a very positive note and trying to encourage everyone that this airline will come out successfully from bankruptcy protection.
It was very emotional, as you can see, employees who own 55 percent of the airline really very emotional on this day of Chapter 11 because they had worked very hard to try to come up with enough wage concessions to satisfy the government, which turned down United's $1.8 billion federal loan guaranty application last week and made this pretty much a necessity.
And here's what Tilton had to say about what the airline is going to do next.
(BEGIN VIDEO CLIP)
GLENN TILTON, CEO, UNITED AIRLINES: We're going to look at the entire business, really soup to nuts, everything. We're going to examine every element of the business. We have been doing so for the past few months, and that includes every component of the margin, from labor costs to non-labor costs, to revenue realization and to profit improvement initiatives. All of those things need to be considered to dramatically improve our margin, which, obviously, since we are now in a cash negative position, is insufficient. So we're going to examine everything.
(END VIDEO CLIP)
RODGERS: And obviously the entire airline industry is going through this kind of massive restructuring in this new economic environment and post-9/11. One of the things Mr. Tilton said is that this airline has to broaden its customer base.
And here to talk with us a little bit about how it might do that is Herb Hunter. He is the spokesperson for the United pilots.
Thanks for joining us -- Herb.
HERB HUNTER, PILOTS SPOKESPERSON, UNITED AIRLINES: Hi -- Ceci.
RODGERS: So how do you feel today after this Chapter 11 filing?
HUNTER: Well it's depressing and tragic in that all of the employees here at United Airlines pulled together behind Mr. Tilton and we had a plan that we believe in our hearts would have worked. The ATSB didn't see it that way. Ironically, in your opening statement, you addressed the September 11 tragedy and the aftermath. And you know when that loan program came about, who else other than an aircraft or an air carrier that lost two aircraft to assassination of its crews would have qualified, but the people who control it didn't see it that way.
RODGERS: So, obviously, still a very emotional issue. Thanks for joining us. We have to wrap.
HUNTER: Right. Thank you.
RODGERS: And we'll take -- send it back to you. But needless to say, this is a -- this is a very emotional day for the employees, but the passengers see very little difference, if any, in this airline after the Chapter 11 filing -- Leon.
HARRIS: Ceci Rodgers in Chicago at O'Hare Airport. Thanks, Ceci, we'll see you soon.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
