February 8, 2006 - ORD Operational Excellence

Hi, this is Glenn on Wednesday, the 8th of February, and I am calling from Chicago, where I have just spent a few hours with our Chief Operating Officer Pete McDonald and his leadership team discussing our goals for 2006.

When we marked our exit from bankruptcy on this call last week, I noted a central fact of our restructuring that is clear to everyone who watches our company.  We have leveled the playing field, and have earned the right to compete and succeed in every part of our business.

But with this right to compete comes responsibility -- to make our business stronger every day.  Where we can serve our customers better, we will.  And where we can make our operations more productive and effective, we must.  Because the heart of our success will lie not in what we have accomplished so far, but in how we build on these accomplishments going forward.

So today, I've asked Larry De Shon, our senior vice president of Airport Operations, to join me on the call to discuss the intense work underway at O'Hare to improve the way we do business at our most critical hub.  These are changes that are already having a noticeable effect on our results in Chicago and in our ability to serve passengers throughout the United system.

So Larry, I'll turn the call over to you.

 

Larry De Shon

Thanks, Glenn.

There is, in fact, much good work going on at O'Hare to further enhance the hub's customer experience and competitiveness.  And the results of this work will contribute to the success of many of our airports as O'Hare has to run well for the entire system to function at peak performance.

A collaborative team of all my direct reports and the station’s leaders has been hard at work for four weeks now and has shown excellent progress to date in both our United and United Express products.

All of the work is focused around having the right people with the right tools at the right place and at the right time.  And this is exactly what Airport Operations' core transformation efforts are all about – whether the standard work we're implementing is referred to as FIT or Resource Optimization, it's all about continuous improvement and delivering better performance and margins.

First, we are improving the accuracy between manpower forecasting and day-of-deployment to make sure we have the proper staffing to effectively meet the work load.

We are putting more ramp and customer service employees on the job – in line with the 2006 budget, but expediting the process to specifically focus on afternoon shifts, when the most delays occur.

We are expanding training on the ramp so that we have more guide people ready to receive and dispatch the aircraft.  Already our pilots have told me they have noticed a significant improvement in ramp readiness upon arrival.

We're also allocating the right amount of manpower to improve passenger loading bridge performance, which has actually exceeded goal for the past two weeks.

We need to give our people the tools to succeed, so with our 2006 capital plan now approved, we have fast tracked O’Hare and ordered 17 belt loaders for the United Express operations, with the first two to be delivered next week.

In addition, ISD is assisting the station to shore up its lobby and gate printers prior to the Project Newton solutions that are coming.  Nearly 1 million dollars has been allocated for radios, scanners, new computers for the Station Operations Control center and other critical tools. 

To better support our ramp employees in achieving their goals, we are reducing the span of control of our supervisors from 10 or 11 gates currently to five to six gates.  This will allow the leadership team as a whole to spend more time on the front line problem solving and coaching.

I'm pleased to report that last Thursday, February 2nd, was O'Hare's best mainline performance since September of last year, with 72.8 percent of flights leaving on-time.  And just yesterday, United Express saw on-time performance of 81.1 percent...our best performance since we started ground handling the Express flights.

Other performance metrics continue to trend upward, as well.  O'Hare's on-time departure zero for January was up 8 percent or three points compared with January 2005.  Arrival 14 is up more than 13 percent, or nearly 8 points, over the comparable period last year.  Our mishandled baggage performance is doing well, too, with January showing a 7.4 point improvement year-over-year.

In addition, Glenn, there's been significant work happening over a longer period of time to turn around certain operations at O'Hare. 

A great success story has been the ramp operation in our International Terminal, T-5, which was once one of our most problematic areas as the terminal's location and baggage systems presented many obstacles, contributing to an increased number of missed bags.

Since June, and working with our FIT experts on continuous improvement, the team looked at three primary drivers that have led to dramatic improvement. 

First, they structured equipment readiness around accountability to make certain they had the tractors and other vehicles in place at the start of the shift.

They tackled baggage scanning, which is essential because T-5 is our first inbound tracking point for international baggage and are now often at the top in terms of performance.

Finally, they now utilize performance boards to track results every shift and then set goals on a daily basis.

Prior to this intense work, the area was averaging more than 900 missed bags a day.  Just last week, the T-5 team averaged only 88 missed bags to both mainline and Express flights.  And once the new inline baggage screening system comes online in March, missed bags should go to near zero.

Just an outstanding team effort all around.

Back to you, Glenn...

 

Glenn Tilton

Thanks very much, Larry.  I appreciate the solid and good work that you, your team and so many United employees at O'Hare are doing to aggressively reinvigorate our operations and, by extension, our service to our United customers systemwide.

We have started a new beginning for United with a promising future that is ours now for the taking.  It's up to all of us to deliver, through continuous improvement and by working harder and smarter than our competitors.

That's all for now on this call.  I'll be talking to you again soon.  Until then, stay focused on our customers, on one another and stay united.  And as I said last week, now it is really time to fly.