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CNN Live At Daybreak

Goodwin Out as CEO of United Airlines

Aired October 29, 2001 - 06:16   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: The September 11 attacks left the airline industry scrambling to cover huge financial losses. As CNN's Greg Clarkin reports this morning, tough economic times are touching off changes at United Airlines.

(BEGIN VIDEOTAPE)

GREG CLARKIN, CNN CORRESPONDENT (voice-over): James Goodwin is out as CEO of United Airlines, just weeks after warning the nation's second-largest airline was in danger of going bankrupt. Goodwin's resignation was demanded by some of United's unions, after he warned that United would -- quote -- "perish next year." The unions said his comments had panicked employees and customers. Goodwin blamed the September 11 terrorist attacks with pushing United to the brink of bankruptcy.

But United's new chief, board member John Creighton, disagrees.

JOHN CREIGHTON, UNITED AIRLINES: I didn't take this job to preside over a bankruptcy. I refuse to accept that United Airlines is collateral damage from the events of September 11.

CLARKIN: It's estimated United lost as much as $1 billion during the third quarter, after losing more than 700 million in the first half of the year. Wall Street will know for sure later this week when parent company, UAL, releases financial results.

But United is hardly alone. All of the major airlines are expected to post massive losses for the quarter, as they struggle to rebuild from the terrorist attacks.

RAYMOND NEIDL, SPOKESPERSON, ABN AMRO: Any airline can perish by next year if people won't start coming back to travel. I think United is, despite its vast and huge system and strong cash flow, I think they are in a little bit more danger than most of their larger competitors.

CLARKIN: United has the highest cost of any major U.S. airline, and it relies heavily on business travelers, whose numbers have dropped, given the weak economy and the attacks. UAL shares reflect the troubles. The stock is down more than 60 percent for the year, and trading at a 14-year low.

Goodwin had tried to remake United through a merger with US Airways. That $12 billion proposal failed this summer, after regulators said they would sue to block the deal.

United has already slashed jobs and cut its number of flights, and now incoming CEO Creighton says he will look for even more cost savings as he tries to stabilize the airline.

Greg Clarkin, CNN Financial News, New York.

(END VIDEOTAPE)

HARRIS: No question, that's going to have an effect on the market today.

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