Hello, this is Larry De Shon and welcome to FLT-LINE. Today is Friday, October 18th.

Today, the company announced its third quarter financial results. I’ll share some of the basics with you and ask that you read today’s NewsReal for detailed information.

We incurred a third-quarter loss of $503 million before special items. This performance compares to a third quarter 2001 loss of $542 million, excluding special items. UAL’s quarterly loss, including the special items, is $889 million. This compares to a third quarter 2001 loss of $1.2 billion, including special items.

In response to our financial results, Glenn Tilton, chairman, president and chief executive officer, said, (Quote) “There is no question that United continues to suffer from the financial challenges that plague our entire industry. Nevertheless, we continue to run a great operation and provide outstanding service for our customers in this very difficult environment.

“While no one underestimates the magnitude of the challenge, we are making good progress on our financial recovery program,” Tilton said. “We continue to work vigorously with all of our unions and other parties to achieve our number one goal: restoring the financial health of this airline without the necessity of an in-court process.  The energies of management and labor are intensely focused on reaching our goal. At this point nobody should consider a Chapter 11 filing inevitable.” (End quote)

For many reasons, a Chapter 11 resolution is undesirable, as it is extremely unpredictable, and it is impossible to know how our dedicated employees would be affected. I cannot give you specific information or a date we will be in a position to answer all of your questions about flight attendant participation. However, United intends to file an updated business plan with the Air Transportation Stabilization Board that includes details on the company’s discussions with labor groups, lenders and suppliers and outlines plans for non-labor expense and revenue improvements that United believes makes a compelling case for federal loan guarantees as well as for the company’s ability to return to financial health and profitability. This process is progressing and we are moving quickly to finalize the structure and content of this plan.

In the meantime, we are running a great operation and are moving forward with cost saving and revenue generating ideas throughout the system. I encourage you to take a look at the Recovery Site on SkyNet to view or submit suggestions, which support our financial recovery effort.

Speaking of financial issues, now I’ll talk about the cost-effectiveness of our international domiciles. Numerous flight attendants have asked me about the continuing viability of our international domiciles, as they believe we would save a lot of money and better protect flight attendant jobs if we didn’t have them. Let’s not forget that the flight attendants based at the international domiciles are members of the AFA and they play an important role in our ability to compete on a worldwide basis. That said, I’ll start with the financial side of things…

On a regular basis, we evaluate the financial feasibility of each and every U.S. and international domicile. We consider the system aircraft schedule, average flight attendant salary, credit time costs, flight attendant qualifications, per diem, ORC, currency fluctuation and, lodging and transportation costs. Domicile flying and flight attendant schedules are then created, which are cost effective and efficient based on these criteria.

International domiciles not only provide a positive cost advantage but they give us a competitive advantage over those U.S. carriers with which we compete internationally.  Our language-qualified flight attendants support 13 languages for which lines are created. With our international domiciles, we further benefit from our flight attendants being conversant in over 30 languages and dialects.

When it comes to international flying, we carefully weigh all of the financial and contractual ramifications to support the system aircraft schedule. It is a fact that international domiciles are more economically efficient for certain flying. We can build trips that require less time away from home and are less costly on a credit time, per diem and ORC basis. In many cases, hotel and transportation costs in U.S. cities are far lower than in international cities.

Here are a couple of examples of how international domiciles save money…

In October and November, we made several flying changes for the Honolulu, Narita and Taipei domiciles. Honolulu picked up more West Coast flying and Narita picked up the Honolulu-Narita base trip. We had some manpower overages in Taipei, as the San Francisco trip was downgauged from a Boeing 747-400 to a 777.  So… Taipei picked up some Narita flying in addition to their San Francisco trip. Through these changes, we were able to reduce our daily hotel costs by 22 rooms per day. Additionally, the requirement to pay ORC was eliminated and per diem and trip credit time was reduced.

Now let’s take a look at the Bangkok and Singapore situation. As you know, the regional flight attendant bases closed last fall. Hong Kong and Narita have assumed the intra-Asia flying. Although it’s more expensive to operate this flying with Hong Kong and Narita flight attendants versus regional flight attendants, this far outweighs the costs associated with U.S.-based flight attendants flying the intra-Asia trips.  At a minimum, we would have to build six-day trips to cover flying over the Pacific and an intra-Asia round-trip. This type of flying is costly and inefficient for many reasons. Above and beyond the trip costs, building lines and reserve patterns to cover the flying would drive costs even higher through potential inefficiency. In the event of an irregular operation, we would have less flexibility in covering trips within Asia, and the same would be true in Europe, although on a smaller scale. And, from a quality of life perspective, this type of flying is difficult and, minimizes flexibility for trades and ANP.

As I said earlier, we regularly evaluate the financial feasibility of every domicile. Base IDs for both domestic and international flying can move from domicile to domicile based on economics. We look for every opportunity to increase trip efficiency and long-term cost effectiveness based on economic trends. When it no longer makes financial sense, we are left with no choice but to change a domicile’s flying or close the location.  Although many factors are considered, in the end, it all comes down to economics.

Now, I’ll close this week’s message by thanking the Clipped Wings’ volunteers who are supporting flight attendants during phase two of Cabin Defense Security (CDS) Training.  Former flight attendants Pamela Berding, Mary K. Dana, Barbara Dittig, Peggy Parietti, Louise Kuret, Elaine McGann, Barbara Bertacini and Gail Walker were on location the past two weeks to welcome and support CDS trainees.

In a time when every cost is closely scrutinized, the Clipped Wingers rose to the occasion by volunteering their time for United Airlines. This organization, which is comprised of former and current United flight attendants who volunteer for Special Olympics, have made themselves available to act as ambassadors for this important training program. They have committed their membership to supporting CDS over the next two years.

The original uniform hats and unique scarves the volunteers are wearing easily identify them. It’s a nostalgic experience to see them in past uniform pieces. As you return to headquarters for training, be sure to check in with the Clipped Wingers. They are delighted to be back at United and to be reliving their flight attendant experiences.

That’s it for this week’s message. Be sure to check back next Friday for an updated message. Thank you.