- The Washington Times - Tuesday, October 30, 2001

CHICAGO (AP) United Airlines' new chief got a lift yesterday from Wall Street to go with the endorsements of its unions, producing a rare upswing in both its stock price and labor relations after more than a year of turmoil.
Industry analysts said John Creighton, facing a difficult year ahead in the airline business, must convert that goodwill into substantial labor concessions as he moves to convert troubled United into a smaller but again-profitable airline.
Shares in UAL Corp. leaped as much as 10 percent yesterday in investors' initial, relieved reaction to United's replacement of James Goodwin the previous day, then settled to a more modest gain on a day when most stocks fell.
Bouncing off last week's 14-year lows, the stock rose 22 cents, or 1.6 percent, to close at $14.15 in trading on the New York Stock Exchange. It remained down nearly 70 percent since January, when United was the nation's biggest airline and was awaiting approval of its since-failed merger with US Airways of Arlington, Va.
Mr. Creighton didn't raise hopes for quick improvement when his election was announced Sunday by the UAL board and neither have analysts, who expect the carrier to report a quarterly loss of $500 million to $600 million on Thursday, excluding special items.
"I don't think it changes anything," said Helane Becker of the Buckingham Research Group. "They can't continue to lose this much money and survive."
Mr. Creighton's lack of operating experience in the airline industry concerns some analysts as United, now the second biggest in the industry after American Airlines, tries to swiftly restructure amid a huge decline in passenger traffic, particularly since the Sept. 11 attacks.
But Morningstar's Jonathan Schrader described the 69-year-old former Weyerhaeuser Co. chief executive officer as "a very good interim choice" because of his success dealing with labor unions.
"Once they can get people to fly again and they will their biggest problem is their cost structure," the analyst said. "The fact he's already gained support from the pilots' union, the most influential union there, is a promising sign that United and its unions will be able to work together" on necessary cost-cutting steps.
While Mr. Creighton has avoided specifics, he is considered certain to be seeking wage cuts from the industry-leading contracts that United's 10,000 pilots won a year ago at the majority employee-owned company. The pilots' board representative, Rick Dubinsky, joined in Sunday's unanimous vote for Mr. Creighton.
Union spokesman Herb Hunter declined to say whether the pilots will be more amenable to reopening the contract under Mr. Creighton than Mr. Goodwin. But he called the management shake-up "a good first step," especially because Mr. Creighton said he wants to work with the employee groups.
"This is a new chance for us to start over," Mr. Hunter said. "What we want to do is what's best for the company and what's best for the members."
The International Association of Machinists and Aerospace Workers, which represents more than 45,000 United employees, also applauded Mr. Creighton's choice. Still-deadlocked are contract talks concerning ramp workers, customer-service workers and mechanics.


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