"United Failure Another Replay"

Sunday, March 16, 2003

UNITED FAILURE ANOTHER REPLAY
By PAUL THARP
The New York (NY) Post


Aviation wishes its "airlines of tomorrow" were already here.

Futuristic airport robots and foolproof check-in gadgets are expected to
bring big savings, but many industry-watchers say carriers still would be
fighting a perennial struggle against financial ruin.

United Air Lines, for example, is said to be closer to total liquidation
despite its do-or-die efforts to reorganize in bankruptcy court.

Some industry sources believe United, the world's second-largest carrier, is
beyond rescue, due to bloated labor costs. Last week it asked the court for
six more months to hammer out a new, lower pay structure with its unions,
which may be futile.

"Talk's getting much stronger that United will liquidate," said Tom Burke,
senior aviation analyst at Washington, D.C. consulting firm Avmark.

"In that case, American Airlines will cherry-pick United's best routes, and
one more airline will be gone."

About every 10 years, at least one major airline and a handful of smaller
carriers go bust, such as Eastern, Pan Am, TWA.
Burke said the "decade of doom" cycle is right on time this decade.

"We've been on this 10-year cycle probably since modern aviation started,"
he said.

Generally, carriers order new planes five years in advance, at the peak of
good times, but by the time the planes arrive, our economy is cycling
downward. Travel then shrinks and carriers can't afford debt loads for new
planes.

Despite frequent wipeouts, technological advances made during the intervals
have brought great efficiencies and new life to the industry.

But the 2000 decade may be different - terrorists seem to be creating a
hurdle no one's solved yet.

Some carriers are already saving a bundle on certain new technology - such
as paperless tickets and do-it-yourself check-ins - but the headaches and
boondoggles of security tend to push any advances two steps backwards.

American Airlines, the world's largest carrier, is furiously installing
hundreds of do-it-yourself check-in terminals at major airports. JFK's
self-serve terminals got boosted by 50 percent last month to 27; LaGuardia
has 22, and Newark 10.

The ATM-like devices cost $15,000 each installed, a significant savings over
the typical $50,000 cost of an employee at a check-in counter, which is
manned by five people. Soon, counters at major airports will be reduced to
just one person, says American

Mary McKee, American's director of airport automation, says it takes about 1
minute to get a passenger checked in with a self-serve terminal. She says 40
percent of domestic passengers using electronic tickets check themselves in.

"The demand is increasing very much," McKee said.

She said it will rise even more when American switches to all paperless
tickets later this year.

No one seems to have any speedy ways yet to get passengers through security
checks, which take an hour or more.

"The security issue is hurting," said Avmark's Burke. "The hassle factor is
driving people away. The industry wonders if some of the security
bureaucracy is just window dressing. There's a lot of stupidity involved in
it."

He told how a scanner at one airport had been accidentally unplugged by its
operator's foot. "When it was discovered unplugged, the protocol required
the whole airport to be evacuated."

While researchers experiment with unproven wonder-gadgets and high-tech ways
to catch terrorists, American says it's working on finding savings caused by
the security bottlenecks.

American says it plans to eliminate or re-configure its old boarding area
waiting rooms at the gates, since security searches are made well before any
passengers reach the gates. The areas could be converted to retail or
entertainment locations, adding new revenue.

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