United Waits, Delta Warns
NOTE: Shortly after we went to press and, we learned
that the UAL loan guarantee request was denied by the ATSB.
According to an official statement... "The
Department of Transportation remains prepared to consider United's
application in the event that United submits a request for
reconsideration accompanied by additional financial
Count the stripes in
the boardroom wallpaper.
Paper clip origami.
Trash basket basketball.
These are things you can do while waiting for the government to
approve $1.6 billion in loan guarantees for your struggling
United Airlines CEO Glenn Tilton (below, right) is, however,
taking a much more active role while waiting for the Air
Transportation Stabilization Board to decide on whether to grant
his airline's request.
"He's in Washington one
day, Frankfurt the next, Singapore the third, and back at his desk
at week's end," said James J. O'Connor, a member of the board at
United. "The man is positively indefatigable."
Tilton is both lobbying for the loan guarantees and shopping the
world for new money in an effort to bring United out of Chapter 11.
The New York Times reports the ATSB could make its decision on
whether to grant the loan guarantees in the next few days.
Thursday, Tilton abruptly cancelled an appearance at a New York
transportation conference sponsored by Merrill Lynch so he could
race to Washington (DC) for a meeting with ATSB staff members. Last
week, staffers asked United for more information on the
The Times reports United executives are confident that, even
without federal backing, their airline can successfully emerge from
bankruptcy by the end of the year. But Wall Street is
"If United doesn't get the guarantees, Glenn Tilton had best
resign, because he'll be rendered impotent in going after
additional investors," said Business Travel Coalition Chairman
Delta To Pilots: Need For Deep Cuts Becomes Even More
In the meantime, Delta Airlines CEO Gerald Grinstein once again
called for salary and benefit cuts from its pilots -- the best paid
cockpit jockeys in the business.
"It is time to reengage and get the discussions back on track,"
he said, quoted in the Atlanta Journal-Constitution. Talks between
the pilots' union and the airline stalled after Delta asked crews
to take a 30-percent salary cut. The pilots are offering nine and
say they'll forego a scheduled raise.
But pilot cuts alone
won't save Delta, said Grinstein. Its entire way of doing business
will have to change if the airline is to survive, he said.
"It is clear that Delta as it is now structured cannot survive
in the marketplace. We have to completely change the way we do
business," he said. "We are in an environment where we have no
pricing power, yields continue to erode, and that's in the face of
an improving economy."