March 12, 2007 – Handling Irregular Operations

Hi, it's Glenn.  It's Monday, the 12th of March.   I'm calling today from Chicago.  As all of us know, long delays and the manner in which airlines handle irregular operations have been the subject of much discussion recently in the media, in Washington and, most importantly, among our customers.  While we at United have a good track record for safely handling delays and difficult weather, we haven't escaped some attention.

I've asked Peter McDonald, our chief operating officer, to join me on today's call to put this issue in context of the industry's overall air traffic situation, to provide more information on the longer-term work we've had under way for several months and new efforts designed to improve our handling of delay and weather situations.

So with that introduction, I'll now turn the call over to you, Pete.

Pete:

Thanks, Glenn.  According to data from the Federal Aviation Administration, U.S. industry air traffic control -- or ATC delays -- have increased nearly 9 percent every year since 2002.   During that same time, total departures at the 32 busiest airports across the country actually dropped.  Flow-control delays are mandated by the FAA due to weather, traffic congestion in the sky or at an airport and a number of other factors.

Eight airports are more exposed to ATC issues than any others in the country -- O'Hare, Newark, Atlanta, LaGuardia, Philadelphia, JFK, Boston and San Francisco.  With two of our hubs and several major line stations on that list, it's easy to see that the increase in ATC problems hits United harder than most other carriers.  In fact, United mainline ATC and weather delay minutes increased 15 percent, compared to 11 percent for other carriers.

All this means the system that supports airlines and the customers who depend on them isn't working as efficiently as it could.  In this kind of environment, the delays and difficulties that come with weather are magnified and complicated for our customers.  While the issues that surround the ATC system are complex and will take serious solutions, many of which are out of reach of the airline industry, the answer for airlines is to resolve the issues we can control and work with ATC officials to improve operating conditions for our customers -- and that's just what we're doing.

To handle more effectively the issues we control, we proactively cancel in advance of storms, communicating with our customers before they leave for the airport.  Using this process, we give our customers options and keep them informed, manage our operations more efficiently and recover more quickly.  Ultimately, our customers tell us it's a better way to manage disruptions to their travel.

We are also focusing on United Express diversions.  With our mainline operations, we manage aircraft diversions all around the world under the most extraordinary circumstances safely and with professionalism.  However, our customers flying with United Express don't always have the same kind of experience.  We're fixing that.  We've decided to always have a person in our System Operations Control Center managing United Express diversions, the same way we have someone watching over United diversions.  The goal is to make sure we're tracking all of the details of a diversion and taking care of the people affected.

We're also taking a look at our policies for holding aircraft on the ground to provide more guidance to our pilots and station operations staff on when a delayed flight should return to the gate.  We have very specific guidelines on the safe operation of flights in weather situations.  We are getting just as specific around service guidelines so we can make good judgments about our customers' comfort.

Through our Customer Experience team, we're improving how quickly we can respond to customers' needs during irregular operations situations, focusing on providing good choices to our customers.   For our premium customers, in the event their flight cancels because of weather, we're getting them on the next available flight out.  We are deploying kiosks on the concourses of our hubs and major line stations so customers can get flight information and rebook their own travel.   We're updating tools and improving the flow of information through our systems to resolve customer problems quickly and easily at the gates, service centers and through reservations.

While we address all the issues that complicate travel for customers, we're also cooperating with the officials who run the air traffic system in a number of areas.  Most of these projects are longer-term infrastructure improvements, such as certifications for new runways, or new procedures to improve the use of airspace.  We're also taking the lead in testing and implementing new technologies, like new radar, satellite and GPS systems that will improve airline operations across the country.  The goal of all these efforts is to drive improvements in the overall operating environment.  While this work won't fix the major issues confronting the ATC system -- that will take serious commitments from the FAA, the government and the whole aviation industry -- we can make some improvements.

All of these efforts ultimately will add up to a better experience for our customers.  Importantly, though, even on a continued effort to uncover issues and continue to correct them over time, the interactions between the people who keep our airline running day to day and our customers are still a critical piece of the equation.

We will have weather and we will have difficult days.  We can continue to make a difference on those days through the way we treat people.  We hear over and over again from our customers that we determine the ultimate quality of an experience by the way we handle it -- person to person.  When we handle it well, we turn a bad situation around or make good outcomes great.   When we handle it poorly, we make everything worse.  Our challenge, in the midst of the difficult operating days, is to continue to handle it well -- with empathy and consideration.  That's what our customers, who are paying for our service, expect from us -- no matter what's happening in the environment.  That's what we have to deliver.

Glenn, back to you...    

Glenn:

Thanks, Pete.   We hold ourselves to a high standard of safety and service in handling delays during difficult weather and irregular operations.  However, customers are impatient with the industry's failures and will continue to shine the spotlight on the kind of experiences that have captured headlines in recent weeks.

The air traffic control system is one of the most important challenges facing the U.S. aviation industry today. I'll be in Washington, D.C., this Thursday to give the luncheon keynote at the 32nd Annual Federal Aviation Administration Aviation Forecast Conference.  At the conference, we will discuss how critical it is for the U.S. aviation infrastructure to keep pace with both the global industry and projected increases in demand for air travel.      

That's all for now.  I'll be talking to you again soon.  Until then, stay focused on our customers, and, of course, on one another…and stay united.