Jumpseatnews.com - United Airlines flight attendant resources
SPECIAL MESSAGE from Glen Tilton, discussing United's new goals and strategies.
Date: Dec 16, 2002
December 16, 2002
To All United Employees:
Last week was the beginning of a time of change and
uncertainty for our company. One of my top
priorities was to spend time with employees and hold
discussions at our hub locations in the United
States. This was a very informative and energizing
experience for me personally.
In the meetings, I wanted to ensure that people had
a clear understanding of our situation. I also
wanted to listen to questions and provide answers.
I met with employees in a Denver break room Tuesday
morning and Los Angeles that afternoon, in San
Francisco on Wednesday and Washington Dulles on
Thursday. We wrapped up this round of employee
meetings in Chicago. In this letter, I want to share
with you some of what we discussed last week.
Clearly, how we will work our way through Chapter 11
and what United will look like when we emerge
dominated everyone's concerns.
One of the critical issues at all locations was the
relationship between management and labor. We have
demonstrated that we can work well together through
the coalition in recent months and we want to
continue that relationship. In fact, while I was
meeting with employees last week, our management and
labor teams met with union representatives and
talked about the future. They discussed the airline
we need to create, our financial situation and our
business plan.
The message for all of us is that we must move
quickly to build a common understanding of the
issues and time sensitivities we now face. We are
confronting two challenges: implementing specific
changes necessary to satisfy our lenders in the
short term and building into our business the
durability, sustainability and resilience we need
for the long-term future of United.
To create that long-term future, we already know the
key steps we must take:
* We have to be relevant to the marketplace -- that
means we must offer customers products they want at
prices they are willing to pay. We have to meet
customers' needs by broadening our service and
offering value propositions that appeal to different
customer segments. To do that, we have to
significantly lower our costs, which today are too
high to allow us to be competitive.
* We also must protect and strengthen our core
business -- our mainline service -- and maintain and
build on our success with our alliance partners.
* We must take on the competitive threat of low-
cost carriers that are attacking a large percent of
United's route structure in the United States. They
are growing; we are not and the market is not. That
means their growth is coming from us. Their growth
comes from us because they can make a profit on a
fare that we can't.
I know that some of you are asking why we now have
to go further in cost reductions than we
contemplated in the Air Transportation Stabilization
Board (ATSB) process. Simply put, the plan
submitted to the ATSB was designed to stabilize the
company, however, we knew there was more to do going
forward. What we are seeking now is to transform
the company for the long term and to make that
transformation sustainable. And, the realities of
Chapter 11 and the Debtor in Possession (DIP)
financing we have arranged demand that we do so. If
we fail to reach the cost reduction milestones under
our DIP loan, we will not be able to pull down the
next payment of financing.
So, we must change our cost structure and revenue
line by creating new offerings for our customers
that can compete with the most competitive of our
peers and the low-cost carriers. We are building a
long-term business plan that will make us a
successful competitor.
While this process will be difficult, to succeed, we
have to work together. I am confident that we will
emerge from this process a stronger, better company.
In the days and weeks ahead, it is vital that we
continue to maintain focus on our customers and on
running the safest and most efficient airline. We
can influence our future every day in a way we never
have before. Thank you for your continued support
and commitment.
Sincerely,
Glenn Tilton
To All United Employees:
Last week was the beginning of a time of change and
uncertainty for our company. One of my top
priorities was to spend time with employees and hold
discussions at our hub locations in the United
States. This was a very informative and energizing
experience for me personally.
In the meetings, I wanted to ensure that people had
a clear understanding of our situation. I also
wanted to listen to questions and provide answers.
I met with employees in a Denver break room Tuesday
morning and Los Angeles that afternoon, in San
Francisco on Wednesday and Washington Dulles on
Thursday. We wrapped up this round of employee
meetings in Chicago. In this letter, I want to share
with you some of what we discussed last week.
Clearly, how we will work our way through Chapter 11
and what United will look like when we emerge
dominated everyone's concerns.
One of the critical issues at all locations was the
relationship between management and labor. We have
demonstrated that we can work well together through
the coalition in recent months and we want to
continue that relationship. In fact, while I was
meeting with employees last week, our management and
labor teams met with union representatives and
talked about the future. They discussed the airline
we need to create, our financial situation and our
business plan.
The message for all of us is that we must move
quickly to build a common understanding of the
issues and time sensitivities we now face. We are
confronting two challenges: implementing specific
changes necessary to satisfy our lenders in the
short term and building into our business the
durability, sustainability and resilience we need
for the long-term future of United.
To create that long-term future, we already know the
key steps we must take:
* We have to be relevant to the marketplace -- that
means we must offer customers products they want at
prices they are willing to pay. We have to meet
customers' needs by broadening our service and
offering value propositions that appeal to different
customer segments. To do that, we have to
significantly lower our costs, which today are too
high to allow us to be competitive.
* We also must protect and strengthen our core
business -- our mainline service -- and maintain and
build on our success with our alliance partners.
* We must take on the competitive threat of low-
cost carriers that are attacking a large percent of
United's route structure in the United States. They
are growing; we are not and the market is not. That
means their growth is coming from us. Their growth
comes from us because they can make a profit on a
fare that we can't.
I know that some of you are asking why we now have
to go further in cost reductions than we
contemplated in the Air Transportation Stabilization
Board (ATSB) process. Simply put, the plan
submitted to the ATSB was designed to stabilize the
company, however, we knew there was more to do going
forward. What we are seeking now is to transform
the company for the long term and to make that
transformation sustainable. And, the realities of
Chapter 11 and the Debtor in Possession (DIP)
financing we have arranged demand that we do so. If
we fail to reach the cost reduction milestones under
our DIP loan, we will not be able to pull down the
next payment of financing.
So, we must change our cost structure and revenue
line by creating new offerings for our customers
that can compete with the most competitive of our
peers and the low-cost carriers. We are building a
long-term business plan that will make us a
successful competitor.
While this process will be difficult, to succeed, we
have to work together. I am confident that we will
emerge from this process a stronger, better company.
In the days and weeks ahead, it is vital that we
continue to maintain focus on our customers and on
running the safest and most efficient airline. We
can influence our future every day in a way we never
have before. Thank you for your continued support
and commitment.
Sincerely,
Glenn Tilton
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