Letter from SVP About Changes

Source: SkyNet

Date: January 25, 2006

January 25, 2006

Dear Colleague:

Earlier this month, I talked in my weekly update message about the importance of being the number one airline for our customers. A customer had written to me and told me how the friendliness of his crew and the excellent service reminded him why he makes United his number one airline. In today’s highly competitive airline industry, being number one for millions of customers is a tall order. It requires us to succeed at delivering great service and great value on a consistent basis, while operating in the most efficient and effective means possible.

Over the past three years, we have put an extraordinary amount of effort into restructuring our company and improving our competitive position. This process has meant tremendous change for those of us in the Onboard division, as it has for employees throughout United.

Our willingness to make the changes necessary to ensure our survival and long-term viability, and our success in managing through these changes, are the major reasons why we are preparing to exit bankruptcy next week. We can look at our improved financial and operating performance, particularly in the last year, and see the benefits of our work. Despite our progress, however, standing still isn’t a viable option for us. In fact, no business today can afford to maintain the status quo. Continuous improvement across our business is an absolute necessity for our company to be successful. Often, the difference between a successful business and a failing one is the ability to decide upon and make the right changes.

Today, we are announcing several changes and new initiatives that are aimed at continuing the work that we have been doing over the past three years to improve our ability to serve our customers, manage our operations and operate profitably. These changes impact several areas in Onboard and will help us to remain competitive.

Domicile Changes

As you know, our domiciles are the base from which we lead and manage our Onboard field operations—operations in which our flight attendants deliver the safe and attentive service so important to our customers and our success. Since entering bankruptcy, we have made significant changes to the composition of our fleet of aircraft and to our route structure. We have shifted more flying to international from domestic, and we have canceled poor performing routes. All of these factors have significantly impacted our domicile operations, including where we need to locate domiciles and their size.

During 2005, we undertook a comprehensive review of our operations to determine the appropriate domicile structure given our current and forecasted flying. At the same time, we examined whether our domicile teams perform the right activities to successfully lead our flight attendants in delivering the highest levels of safety and service to our customers and to best meet the needs of our people and our operation. These studies are part of a long-term plan to continuously look at the work we do to ensure that we are meeting the evolving needs of our operation.

Based on our review, we have reached several decisions. We are closing the Paris (CDGSW) and Newark (EWRSW) domiciles and the Philadelphia (PHLSW) modified co-terminal. The last day of operations for CDGSW will be May 1, 2006, and the last day of operations for both EWRSW and PHLSW will be May 31, 2006. Given the changes to our route structure and our fleet, these locations are no longer cost effective to keep open. Flight attendants at those locations will be offered the option to bid for openings at designated domiciles. We are meeting with AFA to obtain their input concerning these closures. Consistent with company policy, the domicile team members at these locations will have the opportunity to compete for open positions within Onboard and other divisions.

We realize that the closure of these locations will have a significant impact on all employees based there and we regret that this decision is necessary. We are meeting with employees who will be affected by these closings to discuss their options and help them with the transition ahead.

In addition, based on the study we conducted last year, which included input from several special teams and the data from a comprehensive activity analysis, we are redefining the work performed by our domicile managers, supervisors and staff. Our intent is to enable our domicile team members to spend more time working with our active flight attendants on matters that will directly impact our safety and service performance, and require them to spend less time on administrative activities. This change is tied to the evolving role of the Service Center, which I will discuss later in this letter. We will be discussing these changes with our domicile team members over the next several weeks in the form of focus groups and meetings to refine our plans.

Crew Desk Consolidation

In 2005, we also conducted a thorough review of our crew desk operations. Based on that work, we have made the decision to close our crew desks at LAX, SFO, DEN and ORD during the course of 2006 and consolidate that work at OPBSK. This consolidation will result in more efficient operations and considerable savings for the company. Flight Operations consolidated all of its crew desk operations several years ago, and we have experience in Onboard with our IAD hub, which has operated effectively with its crew desk operations located at OPBSK. This consolidation process will commence in April, and we expect it to be completed by year-end.

We realize closing our regional crew desks will have a significant impact on our crew desk employees, and we regret that this decision is necessary. Our regional crew desk team members, consistent with company policy, will have the opportunity to compete for new crew desk positions at OPBSK as well as other open positions within Onboard and other divisions. We are meeting with all of our employees who are impacted to discuss their options and help them with the transition ahead.

We understand that this will change how flight attendants and domicile team members will work with crew scheduling. Prior to the consolidation, we will communicate new policies and procedures on how we will work together in a centralized scheduling environment.

Service Center Changes

The Service Center has been a resounding success, with our Service Center team members handling nearly two million flight attendant calls since opening in early 2001. We reviewed the work performed by the Service Center as part of the overall study we conducted last year. Based -3-on the study results, we have decided to move more administrative work from our domiciles into the Service Center, where it will be handled more efficiently and effectively. Further, by shifting this work, our domicile teams will have more time to spend on activities directly related to our active flight attendants and the delivery of top notch safety and service to our customers.

In order to create capacity to accommodate new work, we will move some work currently performed in the Service Center to an outside vendor. As an example, administrative work related to inactive flight attendants will be centralized within the Service Center, while transactional work, such as updating pay record files and initiation of trade runs, will be done by a vendor. The Service Center will manage all work done by the vendor and will continue to handle administrative tasks, such as processing crew badges and pre-closing pay record audits for accuracy. We will utilize a vendor that is currently supporting United’s Reservations organization, and we are confident in the vendor’s ability to meet our needs. Service Center team members have already begun the transition process, and in April, the transfer of transactional work to the vendor will begin.

We understand that these decisions mean a great deal of change for our Service Center team members, and we are meeting with them to discuss our plans and support them with the changes ahead.

Creating a Sustainable Business

The decisions we are announcing today have been carefully considered and are based on many months of study and analysis. They have not been taken lightly as we understand the impact that these decisions will have on many people. We are holding meetings with employees directly impacted and will continue to do so over the next several weeks to assist them with the transitions and changes that they face.

We firmly believe that the changes we are announcing today will put resources where we will need them most over the months and years to come. We expect that these changes will also contribute to improved customer service and increased operational and financial performance, as well as enable better interaction among our flight attendants and their supervisors and managers.

The lessons of the last three years underscore for all of us the importance of creating a sustainable business by attracting and retaining customers and running our operations efficiently and effectively. As I mentioned earlier, our ability to successfully adapt to and manage through change has been a significant factor in our success to date, and I fully expect that to continue.

In closing, I want to thank all of you for your continued commitment to our company, to your fellow employees, and to our customers. The work performed by the members of our team is diverse and each individual plays an important role in our collective success. Working together, we will continue to meet the challenges of this enormously complex and competitive business. Thank you for all that you do every day to make our company a success.

Sincerely,

Jane G. Allen

< Return to In Our News

top of page