Return to Transcripts main page

CNN Live Sunday

Interview With David Field

Aired December 08, 2002 - 15:47   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.


FREDRICKA WHITFIELD, CNN ANCHOR: We're getting word this afternoon that United Airlines plans to file for bankruptcy probably tomorrow now. Sources close to the financially troubled carrier say the paperwork is under way. To get the scoop, we turn to the editor of "Airline Business," David Field. He joins us from Washington. Good to see you, David.
DAVID FIELD, EDITOR, "AIRLINE BUSINESS": Hi.

WHITFIELD: All right. A lot of employees, many of whom of United Airlines, own half, at least half of that airline, have to be wondering, how could they have been blind sided by the number two largest airline like this?

FIELD: I think a lot of employees at United are doing a soul of soul-serving this weekend. Many of them are realizing that employee ownership may have been a noble experiment, but it failed. In part it failed, because the shares that the United employees had were shares they couldn't sell. And ownership means being able to dispose of something rather than being a captive owner. I think they are realizing, as most of us are, that the forces that have put United and the rest of the industry in the situation it's in are bigger than any one company.

WHITFIELD: And talk about shares. After that announcement was made that it might be filing for bankruptcy, stocks plunged something like less than $1 a share. Even if this airline does file bankruptcy, is this a way in which to help salvage anything, or is it likely that it's pretty much over for that airline?

FIELD: I don't think it's over. I think bankruptcy, in a perverse sense, is the best thing that could happen to United right now. Going to bankruptcy really focuses everyone involved on restructuring, on lowering costs, and above all, on reshaping the company.

And up until now, I think United's focus has largely been on lowering costs, lowering costs at the expense of the employees. When you're in bankruptcy court, the sacrifices are shared. There's an element of compulsion in bankruptcy. The bankruptcy court basically forces all parties, not just the workers, to take cuts.

One of the big cuts is going to come from the people who own and lease United's aircraft. And they're going to have to...

WHITFIELD: So you see this primarily as an effort of reorganization? Aren't there some of the smaller airlines, Continental, for example, which isn't really small, but Continental, JetBlue, Southwest even, might they kind of learn from this sort of experience that United is undergoing now, that if United, a number two airline can't make it, then what about for the little guy?

FIELD: I think people like Continental, and above all, prime competitors like American and Delta, are going to learn a real lesson. And that is, you're going to have to cut costs one way or the other.

United's bankruptcy may have a very positive effect in that it's going to make employees at the other traditional carriers, like Delta, like American, like Northwest, realize that they're going to have to deal with some sort of restructuring.

As for these other carriers moving in on United's turf, you'll see some of that. Not all that much. One thing the airlines have learned since September 11 of last year is, grow very, very slowly, if at all.

WHITFIELD: All right, David Field, editor of "Airline Business," thank you very much.

FIELD: Thank you. My pleasure.

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 8, 2002 - 15:47   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: We're getting word this afternoon that United Airlines plans to file for bankruptcy probably tomorrow now. Sources close to the financially troubled carrier say the paperwork is under way. To get the scoop, we turn to the editor of "Airline Business," David Field. He joins us from Washington. Good to see you, David.
DAVID FIELD, EDITOR, "AIRLINE BUSINESS": Hi.

WHITFIELD: All right. A lot of employees, many of whom of United Airlines, own half, at least half of that airline, have to be wondering, how could they have been blind sided by the number two largest airline like this?

FIELD: I think a lot of employees at United are doing a soul of soul-serving this weekend. Many of them are realizing that employee ownership may have been a noble experiment, but it failed. In part it failed, because the shares that the United employees had were shares they couldn't sell. And ownership means being able to dispose of something rather than being a captive owner. I think they are realizing, as most of us are, that the forces that have put United and the rest of the industry in the situation it's in are bigger than any one company.

WHITFIELD: And talk about shares. After that announcement was made that it might be filing for bankruptcy, stocks plunged something like less than $1 a share. Even if this airline does file bankruptcy, is this a way in which to help salvage anything, or is it likely that it's pretty much over for that airline?

FIELD: I don't think it's over. I think bankruptcy, in a perverse sense, is the best thing that could happen to United right now. Going to bankruptcy really focuses everyone involved on restructuring, on lowering costs, and above all, on reshaping the company.

And up until now, I think United's focus has largely been on lowering costs, lowering costs at the expense of the employees. When you're in bankruptcy court, the sacrifices are shared. There's an element of compulsion in bankruptcy. The bankruptcy court basically forces all parties, not just the workers, to take cuts.

One of the big cuts is going to come from the people who own and lease United's aircraft. And they're going to have to...

WHITFIELD: So you see this primarily as an effort of reorganization? Aren't there some of the smaller airlines, Continental, for example, which isn't really small, but Continental, JetBlue, Southwest even, might they kind of learn from this sort of experience that United is undergoing now, that if United, a number two airline can't make it, then what about for the little guy?

FIELD: I think people like Continental, and above all, prime competitors like American and Delta, are going to learn a real lesson. And that is, you're going to have to cut costs one way or the other.

United's bankruptcy may have a very positive effect in that it's going to make employees at the other traditional carriers, like Delta, like American, like Northwest, realize that they're going to have to deal with some sort of restructuring.

As for these other carriers moving in on United's turf, you'll see some of that. Not all that much. One thing the airlines have learned since September 11 of last year is, grow very, very slowly, if at all.

WHITFIELD: All right, David Field, editor of "Airline Business," thank you very much.

FIELD: Thank you. My pleasure.

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