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United Airlines in Bankruptcy

Aired December 09, 2002 - 14:00   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.


KYRA PHILLIPS, CNN ANCHOR: We begin now with the latest and far biggest casualty of the economic turbulence battering the airline industry. United airlines lost $4 billion in the past two years and faced $875 million in debt payments this week alone. That was before today's bankruptcy filing, which the airline is calling a tremendous opportunity to regroup.
What about United's customers? CNN's Jen Rodgers is live from San Francisco with more on that.

Hi -- Jen.

JEN RODGERS, CNN FINANCIAL NEWS: Hi, there, Kyra.

Well, United is the nation's second largest carrier. And of course, we are in the very busy holiday travel season, and there are a lot of travelers here, let me tell you, that have some questions.

So far here in San Francisco today, which is the third largest hub for United after Denver and Chicago, flyers seem pretty unfazed by all of this. They have questions about future travel plans and about miles, but they almost sort of are resigned to the fact that this happens from time to time in the airline business, and they've seen U.S. Airways basically be operating through Chapter 11. And most of them seem pretty confident that United will be able to do the same as well.

That being said, what should you do if you're a United flyer? Well, if you have tickets for upcoming travel this year, don't worry about it. United is saying those will be honored, flights will be operating under a normal course of business.

What about miles? Of course, frequent flyers are obsessed with those miles, and they've been stockpiling them for years now. Well, the airline is saying miles, too, will be honored. You're still going to be able to accrue them when you travel, and you will still be able to redeem them.

Now, what about if you are looking to travel next year? Well, this is where some questions are coming in. Industry experts are really saying United has a pretty good chance of coming out of this, but you can't predict the future. Things happen in Chapter 11. So, if you're buying tickets further out, it's really common sense that the further out you're buying them, the more risky that purchase is. So, that's just something to keep in mind.

Still, for the most part, people that we have talked to here in San Francisco say they plan on sticking by the airline.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They'll have to downsize a little bit probably, but you know, it's just cycle of the way business goes these days. You just have to go with the flow.

UNIDENTIFIED MALE: It's a shame that United's going through this, but hopefully with the restructuring, it will be able to empower them to become a better company. I have had both positive and negative experiences with United over the years, and I find it to be I think in a little disarray right now. And I think the reorganization could only help things.

UNIDENTIFIED MALE: United has been around a while. They're going to continue to be around a while, even in bankruptcy. We have frequent flyer miles. That's a little concern, but you figure any company that would cut off its best customers is going to be in trouble. So, you've got to think they've got some common sense.

(END VIDEO CLIP)

RODGERS: At this point, talking to the company, they say it's premature to detail any sort of cutbacks or layoffs. They say they are studying all of their options, and that they will keep their employees and the public apprised of any changes -- Kyra.

PHILLIPS: Jen, what about dropping coverage of any cities?

RODGERS: I have asked them about that. Of course, they are not saying anything on that. But talking to some experts in the industry, people are saying that it's probably unlikely that they're just going to get out of a city completely. They'll probably keep a little foothold there, so that when they do re-emerge after Chapter 11, then they would be able to start up operations there again, at least that's the take that people are talking about right now.

PHILLIPS: All right, Jen Rodgers, thanks so much.

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 - 14:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: We begin now with the latest and far biggest casualty of the economic turbulence battering the airline industry. United airlines lost $4 billion in the past two years and faced $875 million in debt payments this week alone. That was before today's bankruptcy filing, which the airline is calling a tremendous opportunity to regroup.
What about United's customers? CNN's Jen Rodgers is live from San Francisco with more on that.

Hi -- Jen.

JEN RODGERS, CNN FINANCIAL NEWS: Hi, there, Kyra.

Well, United is the nation's second largest carrier. And of course, we are in the very busy holiday travel season, and there are a lot of travelers here, let me tell you, that have some questions.

So far here in San Francisco today, which is the third largest hub for United after Denver and Chicago, flyers seem pretty unfazed by all of this. They have questions about future travel plans and about miles, but they almost sort of are resigned to the fact that this happens from time to time in the airline business, and they've seen U.S. Airways basically be operating through Chapter 11. And most of them seem pretty confident that United will be able to do the same as well.

That being said, what should you do if you're a United flyer? Well, if you have tickets for upcoming travel this year, don't worry about it. United is saying those will be honored, flights will be operating under a normal course of business.

What about miles? Of course, frequent flyers are obsessed with those miles, and they've been stockpiling them for years now. Well, the airline is saying miles, too, will be honored. You're still going to be able to accrue them when you travel, and you will still be able to redeem them.

Now, what about if you are looking to travel next year? Well, this is where some questions are coming in. Industry experts are really saying United has a pretty good chance of coming out of this, but you can't predict the future. Things happen in Chapter 11. So, if you're buying tickets further out, it's really common sense that the further out you're buying them, the more risky that purchase is. So, that's just something to keep in mind.

Still, for the most part, people that we have talked to here in San Francisco say they plan on sticking by the airline.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They'll have to downsize a little bit probably, but you know, it's just cycle of the way business goes these days. You just have to go with the flow.

UNIDENTIFIED MALE: It's a shame that United's going through this, but hopefully with the restructuring, it will be able to empower them to become a better company. I have had both positive and negative experiences with United over the years, and I find it to be I think in a little disarray right now. And I think the reorganization could only help things.

UNIDENTIFIED MALE: United has been around a while. They're going to continue to be around a while, even in bankruptcy. We have frequent flyer miles. That's a little concern, but you figure any company that would cut off its best customers is going to be in trouble. So, you've got to think they've got some common sense.

(END VIDEO CLIP)

RODGERS: At this point, talking to the company, they say it's premature to detail any sort of cutbacks or layoffs. They say they are studying all of their options, and that they will keep their employees and the public apprised of any changes -- Kyra.

PHILLIPS: Jen, what about dropping coverage of any cities?

RODGERS: I have asked them about that. Of course, they are not saying anything on that. But talking to some experts in the industry, people are saying that it's probably unlikely that they're just going to get out of a city completely. They'll probably keep a little foothold there, so that when they do re-emerge after Chapter 11, then they would be able to start up operations there again, at least that's the take that people are talking about right now.

PHILLIPS: All right, Jen Rodgers, thanks so much.

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