June 13, 2006 – O'Hare's Performance Improvement

Hi, It's Glenn.  It's Tuesday the 13th of June, and I'm calling today from Chicago.  At United, O'Hare's performance determines how the entire system operates.  As a result, when delays at O'Hare increased last year, fixing the critical problems became the number one priority for the Airport Operations division.  In January, the leaders of the division, joined with the O'Hare team, to work together to turn our performance around.

The headquarters and station teams took the time that was necessary to diagnose the fundamental issues and develop solutions that resolved the root cause of the problems.  That collaborative approach to problem solving and to improving our service to our customers sets the standard for how we need to confront issues and capitalize on business opportunities.

Today on the call, Cindy Szadokierski, our vice president of O'Hare operations, joins me to report on the progress the team has made.  Cindy, I'll now turn the call over to you.

Cindy:

Thanks Glenn,

Four months after chartering the O'Hare Operational Excellence team, I'm very pleased to report that we not only improved our performance at O'Hare, but that the improvement has been sustainable -- even over the Memorial Day holiday when load factors were above 95 percent and the weather was difficult at best.  Good operational communication between departmental teams increased.  And through the months, we've created a playbook from what we've learned and we've shared those learnings with other stations across the system. 

When the team was chartered in January, our mission was simple:  to improve our largest hub's performance.  Essential to making the improvements was determining what was creating the challenges we were facing.  And it didn't take us long to realize we had too many projects under way, that our priorities were not clear to our employees and that we didn't have people with the right training on the right shifts to manage load factors that were 7 percentage points higher than we expected.   

Our first priority was to improve cooperation between the O'Hare and headquarters organizations, as well as with our service partners.  This effort gave us all a tremendous opportunity to work together in the operation and to better understand how we support each other.  For example, Vice President of Hub Operations Joanne Calabrese audited Resource Optimization flights, working closely with frontline employees to improve our processes.  Penny Thomas, director of Customer Service Planning, met incoming aircraft on the jet bridge with CSRs as part of the effort to improve passenger loading-bridge performance. 

Everyone's hard work is paying off, as we are really working together more successfully, and our performance reflects it. 
   
A key component of our success was providing our employees with the resources to do their jobs well.  We made some changes to the way we schedule manpower to ensure we have the right people in the right places.  We also provided many of our airport supervisors and operating managers with extensive back-to-basics training that included communication skills and problem solving.

But, of course, you can't claim improved performance unless you measure it.  So, to ensure we were all clear on our priorities, we focused on three key areas and developed metrics:  

1) We wanted to ensure ramp personnel, guiding aircraft into the gate, met the flight promptly.  The successful measurement was no more than 7 pilot reports filed a day;
2) The second area of focus was getting the passenger loading bridge in place and the door opened in less than 3 minutes on 93 percent of our flights; and
3) lastly, we wanted to improve reliability on our STAR flights

The leadership team at O'Hare, including our service partners, sat down and talked about the importance of STAR and about how we depended on each other to perform.  Once we identified the issues key to our success, we put our noses to the grindstone and did the hard work.

The idea was to choreograph our individual organizational efforts into one.  We needed to compete against other hub locations and deliver better results than our competitors rather than competing against ourselves.  While there is still much work left to accomplish, I am proud to say that all of our team's hard work is paying off and the numbers tell the story:

So far in June, a Ramp guide person met 97 percent of all arriving aircraft -- that's up 6 points from January's performance.  And financially, this represents a projected annualized savings of $416,000 from unnecessary fuel consumption.

From February through May, 94 percent of jet bridges were in place at aircraft doors within three minutes of their block arrival -- this was up 2 points from January.

On time departure :00 at O'Hare is better than goal so far in June for United flights, up 10.2 points from January and 12.7 points better than the same period last year.  For United Express, departure :00 is also above goal for the month, and 10.4 points better than the same period last year.
  
More significantly, STAR departure on-time: 00 performance is up 16 points from January and up 12.1 points from the same period last year.  United Express STAR performance is also better than goal month-to-date in June, 11.8 points higher than the same period last year.

And we've earned the number one spot among hubs in United STAR performance two months in a row.  While it is still very early in June, we are well on our way to a third.  Of course, we're not satisfied with these results and we must continuously  work to improve our performance. 

There were also benefits that we can't measure, like the improved working relationships between departmental employee groups at O'Hare.  For example, as we worked to improve guide person performance, supervisors started auditing flights and talking to our pilots after the flight arrived to check progress.  We started to get better information, and this work improved the flow of dialogue between Flight Operations and the Ramp.  Employees now better understand each other's work, and they truly see how their work impacts the big picture.

In the past, too much of the discussion at the airport was centered on which department would be charged with the delay, rather than root causes or how we could improve the process for the customer.  Now, the conversation is about O'Hare performance -- one team -- and how we all are responsible for it.  That's important, because, ultimately, we are working toward the same goal: a better experience for our customers.

Back to you, Glenn.

Glenn:

Cindy, the results so far are more than encouraging.  Thanks for the report. 

As we head into the summer season, with load factors projected to be routinely in the 80s and 90s, we'll continue to be diligent in finding every opportunity to execute more efficiently.  By improving the work that we all do, everyday, we can compete more efficiently and more effectively, and do a better job providing the service levels our customers expect all the time. 

As we raise the bar at United on our own performance, we all know that our competitors will be doing the same.  And we should remind ourselves that all of the constituents who support our company -- our customers and our investors -- have choices about which carrier gets their business and earns their support.  It's up to us to make certain that they choose United.

That's all for now.  We'll be talking to you again soon.  But until we do, stay focused on our customers, stay focused on one another just exactly as Cindy has described at O'Hare and stay united.