"United says cuts 'just the beginning'"

Tuesday, July 13, 2004

United says cuts 'just the beginning' 
The Associated Press 


CHICAGO -- United Airlines is moving to trim costs in its ground operations
and contemplating cuts at headquarters and elsewhere as it seeks to arrange
bankruptcy exit financing, top company officials said Monday.

Chief Operating Officer Pete McDonald told employees on a company hot line
that recent savings measures are "just the beginning" as United scrambles to
cope with high fuel costs and competitive pressures.

"We're looking across the company at everything we do, because we've got a
long way to go before we're really cost-competitive," McDonald said in the
recorded message. "Cost-consciousness is something everyone at United must
focus on."

The comments come two weeks after United's quest for financial assistance
from the government ended in failure when its application for a $1.6 billion
federal loan guarantee was rejected.

Employees have been bracing for the company to possibly target their pension
funds, especially since United faces $4 billion in required pension payments
through 2008.

Chief Executive Glenn Tilton on Monday didn't address whether pension
cutbacks are under consideration, saying only that it will become clearer
what's necessary to attract financing as discussions with the financial
community move forward.

McDonald said United is acting on a recently completed study that outlines
areas where it operates less efficiently than its competitors in cost
management and revenue production. Detailing few specifics, he said areas
being focused on included its maintenance and engineering division, airport
operations and United Express.

He said United has identified one way to lower fuel costs: reducing on-board
weight. In its ground operations, the company is looking at reductions in
everything from ramp activities to online ticket-sale expenses.


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