"United exec says airline has 'turned the corner'"

Thursday, August 21, 2003

United exec says airline has 'turned the corner'
By Greg Griffin
The Denver (CO) Post 


DENVER -- A top United Airlines executive said Wednesday the bankrupt
company has "turned the corner" in its battle to boost revenue and stanch
crippling losses.

"The revenue turnaround has begun," said John Tague, United's executive vice
president for customers. "We're seeing the company's financial situation
gain a great deal of stability."

Tague also said the airline's cash flow has "improved dramatically" in
recent months.

United must increase the cash it generates from operations each month to
satisfy covenants in the loans that are keeping it in business during
bankruptcy.

"We have no near-term concerns about the covenants at all," Tague said in
Denver at a United sales meeting.

Still, he said, the positive trends "are not strong enough to give us
indications of profit."

The carrier lost a staggering $623 million in the second quarter, in part
due to an 18 percent drop in revenue and despite receiving $300 million in
government aid. Analysts predict a loss of more than $300 million in the
third quarter, which ends Sept. 30.

Tague's comments were among the most positive to come from United's
executive ranks since the company filed for bankruptcy in December.

United chief executive Glenn Tilton said in May that, while the company had
made significant progress on cost cuts, slumping revenue remained an
obstacle to its reorganizing efforts.

"For revenues to improve, the economy is going to have to show signs of
significant improvement and the business traveler is going to have to come
back," Tilton said then.

On Tuesday, an industry group reported positive July revenue-growth numbers
for the entire industry. U.S. airlines lost nearly $11 billion in 2002 and
have struggled this year through the SARS epidemic, the Iraqi war and
prolonged sluggishness in the economy.

"Things are starting to look better around the industry," said airline
consultant Jon Ash, managing director of Global Aviation Associates in
Washington. "But I'm not sure anyone is out of the woods yet. There is light
at the end of the tunnel."


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