One On One With United Chairman & CEO Glenn Tilton
Thursday, February 02, 2006SUSiE GHARIB: Shares of UAL Corporation, parent of United Airlines, began trading again today, one day after the carrier emerged from bankruptcy. United executives rang the opening bell at the NASDAQ today, remotely, from United`s terminal one at O`Hare airport in Chicago, the carrier`s largest hub. The stock is trading under the ticker symbol "UAUA." While it started out strong today, it ended down, losing $4.11 to close at $35.89.
Also in Chicago today, NIGHTLY BUSINESS REPORT Midwest bureau chief Diane Eastabrook talked with United`s chairman and CEO Glenn Tilton. She began by asking him about the company`s prospect for getting back into the black.
GLENN TILTON, CHAIRMAN & CEO, UAL CORPORATION: We turned an operating profit in the third quarter of last year for the first time since 2000. So our ability to do so in the third quarter was very encouraging. Oil prices since have gone up. So it`s very difficult to predict the competitive landscape and oil price for 2006. But, oil price affects all of our competitors, so what I`m really saying, Diane, is United is going to be competitive in its results among its network competitors, regardless of what the oil price is.
DIANE EASTABROOK, NIGHTLY BUSINESS REPORT CORRESPONDENT: What happens, though, if oil reaches $70 or more a barrel?
TILTON: Well, Diane, one of the things that we`re seeing now is that there`s a tighter correlation between the ability to raise fares, to correlate with higher fuel price, than there was two years ago. So I think all of us, including the low-cost carriers -- and I`m sure you saw low-cost carrier results yesterday that suggested this is a difficult time for them as well. So we`re all recognizing that this oil price is going to affect us all and my sense is, that there will be rationality in pricing if oil price were to go to $70 or beyond.
EASTABR0OK: You have stated that there is going to be consolidation in the airlines industry. Is United going to acquire another carrier or are you looking to be acquired?
TILTON: We would be a very large company to be digestible by somebody else. So that would just be something to contemplate. Our view is that it should happen, it perhaps will happen, and if it does, I want to be in a position to be able to make a decision to the benefit of our shareholders and United, one way or another, but the landscape is equally unpredictable. With two carriers in reorganization now, others working hard to do what they should while they`re not in reorganization, I think we`ll just have to let the market sort itself out, and then we`ll see what opportunities may be there.
EASTABROOK: Do you still think that United needs to repair its relationship with its labor unions?
TILTON: I think our relationship with our unions is characterized by the statements they made yesterday, which were all forward looking, all investor focused, and all saying, we`ve done the hard work. We want to get on with it. We want to get out there and compete. We want to create value for our shareholders and our employees and our customers. My sense though of what they said yesterday was it was perfectly aligned with everything that I`m saying today.
EASTABROOK: There`s been some speculation that you came to United just to simply shepherd this company through bankruptcy. Are you planning to stay on?
TILTON: I`m here today talking to you in the opening of a new chapter. I`ve got a contract with my new board, which is exciting as well. We put together a new board. They`ll have its first meeting this month that has another 18 months to go on it. There are many things that I have said this company can do that others have said we can`t do, that I`d be delighted to prove them wrong once again. So in that regard, I`ve got a lot of work to do yet.
EASTABROOK: Thank you for joining us.
TILTON: My pleasure.
