May 18, 2001 Chicago Tribune
Bigger planes, fewer flights address delays

Tribune staff reporter
May 18, 2001

PALM BEACH, Fla. -- Seeking to cut costs and appease customers angered by delayed and canceled flights, United Airlines said Thursday it has started assigning larger aircraft to serve certain routes, especially those operated out of Chicago's O'Hare International Airport.

Under the plan, the carrier will be running fewer flights among its five hubs but using the larger planes to carry more passengers on each trip. By reducing the frequency of its service, United is aiming to relieve congestion, especially at hubs in Washington, Denver, San Francisco and Los Angeles, as well as Chicago.

The plan will curtail what James E. Goodwin, chief executive of United parent UAL Corp., described as "wing-tip-to-wing-tip flights." That practice, used by domestic airlines to dominate a market, involves launching several smaller jets within minutes of each other to the same destination.

UAL's move, Goodwin said, will reduce some of the delays that have plagued travelers flying through O'Hare, where more flights were delayed last year than at any other airport in the country.

"We know that improving our reliability is the most important step we can take to maintain the loyalty of our business fliers," he said, noting that business travel has plunged as the economy has cooled.

Seeking to boost business travel, the airline is exploring promotions such as Northwest Airlines' cut this week in first-class fares of 50 percent to 60 percent. AMR Corp.'s American Airlines matched the fares on some non-stop routes, and Delta Air Lines Inc. also said it is cutting first-class fares on flights within North America.

Meantime, United is redirecting some business destination flights to leisure markets such as Aruba. Plus, the airline is accelerating its program for retiring aging aircraft. Already it has mothballed its DC-10s and soon will do the same with its more than 70 Boeing 727 jets.

This fall, Goodwin said, the airline will redirect to domestic markets, including Hawaii, some of the large Boeing 777 and 747 aircraft earmarked for summer use on its Atlantic and Pacific international routes.

Goodwin acknowledged that those moves wouldn't solve the nation's air travel woes, which he again blamed on an outmoded air traffic control system and insufficient airport capacity.

Goodwin said the shifting of flights and other expense cuts already has exceeded the carrier's goal of shaving $210 million in annual costs from operations. The airline announced plans this year to trim costs as business travel plunged.

"As employees focus on cuts, we are finding more expenses that can be cut," he said. United now is projecting savings of $300 million or more, he said.

Despite the cuts, Goodwin said he still anticipates that UAL Corp. will report a loss for the year. The company last month reported a first-quarter loss of $305 million, the largest loss for that period since the Persian Gulf war in 1990-91.

United isn't alone. Together, the nation's airlines lost more than $750 million in the first quarter. The only profitable carriers were Dallas-based Southwest Airlines, the country's largest discount carrier, and Houston-based Continental Airlines, which has significantly lower costs than its rivals.

"The economy stinks," said Goodwin, adding that he does not know when United's fortunes will begin improving.

[Chicago ATC News]