United's return ticket.

• Author: McConnell, Joseph
• Position: Bankrupt Airline Braced for Future - United Air Lines

On Dec. 9 United Airlines' parent company UAL Corp. turned the page on a history more than 75 years in the making. Unfortunately, the page began at Chapter 11. [paragraph] Shaken by labor disputes, the 9/11 terrorist attacks and innovative competition, the nation's second-largest airline was losing $22 million dollars a day by some estimates. UAL is now faced with a difficult reorganization that promises uncertainty if not pain for both its employees and its second largest hub -- Denver International Airport.

At the time UAL filed for bankruptcy, it employed about 81,000 people. To satisfy its lenders and return the carrier to profitability, CEO Glenn Tilton is asking employees to absorb $2.4 billion in pay cuts, furloughs and at least 7,000 layoffs.

Once Denver's fifth-largest employer, providing 7,800 jobs in the Denver area, United laid off 500 employees locally, leaving Denver with about 7,300 United workers. A United spokesman, Chris Brathwaite, said in late January that the job cuts here have ceased.

"All job reductions in Denver are already in place," said Brathwaite. That's not only good for United, but also for Denver because the salaries and spending of United employees alone pumps several hundred million dollars into the local economy each year.

United itself generates roughly $1.4 billion a year at DIA --just $200 million behind its home base at Chicago's O'Hare International Airport. United has created a "fortress" of revenue at DIA: At any given moment almost two-thirds (63 percent) of the flights coming, going, or laying over at DIA are flown by United and its subsidiaries. The result: Denver and United are inexorably intertwined -- for better or for worse.

THREE SCENARIOS

Three basic outcomes are possible following United's bankruptcy filing. The best for almost all interested parties is that UAL restructures and regains, if not increases, its former market strength without interruption of service. A more troubling, second prospect would have United reorganizing into a smaller outfit, reducing its number of flights and routes throughout the globe. A third possibility and the worst for Denver, is Chapter 7 liquidation. Airplanes, equipment, and basically every asset would become the possession of the carrier's bankruptcy lenders; the United name, its worldwide network of flights, and tens of thousands of jobs would cease to exist.

Although the thought of a grounded United scares all concerned parties, cutbacks in flights are...