United Airlines’ Problems Summed Up

Portfolio.com’s business travel columnist, Joe Brancatelli, wrote an excellent article that sums up all of United Airlines’ troubles, perhaps best conveyed in its title: Worst. Airline. Ever.

He offers one of the best summaries of United’s woes in 2008:

Just 29 months removed from the longest, costliest, and least-effective bankruptcy in aviation history, the nation’s second-largest airline is once again facing a financial abyss. United’s first-quarter net loss of $537 million was more than its two main competitors combined. Last month it paid a huge premium to avoid a default on its loan covenants. Its 4 percent decline in passenger traffic in May was twice as steep as that of any of its competitors. Last week’s announcement that it would ground 100 aircraft, reduce capacity by 10 percent, and shed thousands more workers was startling given the huge contraction it already experienced while in bankruptcy. A 19-month search for a merger partner resulted in rejections from Continental Airlines and US Airways, a carrier that was desperate to sell itself to United just eight years ago. The airline’s shares slid into single digits last week from a 52-week high north of $50.

More importantly, he pinpoints United’s failing performances to its 2002 bankruptcy: [Read more]