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United Airlines implements additional cost-reduction initiatives

United Airlines announced that by January 19, 2003, the company will furlough nearly 1,500 management and…

United Airlines announced that by January 19, 2003, the company will furlough nearly 1,500 management and salaried employees as part of its organizational redesign intended to optimize the performance of the airline while reducing United’s cost structure. These furloughs will also help the airline meet the strict requirements of its Chapter 11 financing. All affected employees will be notified as soon as these decisions are finalized.



These changes are part of the process of creating a new business that is competitive, customer-focused and sustainable, said Sara Fields, United’s senior vice president-People. Our People Division has prepared transition services to assist these employees in every way possible during this very difficult time.



United Airlines also announced that as part of the company’s efforts to reduce its operating costs and return to financial stability, the airline will close its remaining 32 City Ticket Offices (CTOs) effective January 28. The closures will result in the furlough of 188 employees.



Our research has shown that an increasing percentage of our customers are utilizing more cost-effective methods to buy their tickets. Rather than traveling to a CTO, more and more customers are buying tickets online or calling United Reservations, said Dan Walsh, vice president-Sales. However, United sincerely regrets the necessity of making this decision because of the impact it will have on our CTO employees and their families.

It’s important for our customers to know that they will still have around-the-clock access to United via United Reservations (800-UNITED1) and united.com,
Walsh continued.



A number of previously announced organizational changes and employee reductions will also be taking effect in the coming days. These include:



Station Conversions/Closings



Effective January 7, 2003 United will convert mainline flying to United Express service at the following five stations: Eugene, Ore.; Medford, Ore.; Cedar Rapids, Iowa; White Plains, N.Y.; and Syracuse, N.Y. United Express carriers – SkyWest, Air Wisconsin and Atlantic Coast Airlines – can more efficiently serve these stations. This action will result in the furlough of approximately 150 employees.



Also on January 7, 2003, United will close stations in Caracas, Venezuela; Santiago, Chile; and Dusseldorf, Germany. The closings will affect 69 employees in Caracas, 110 in Santiago, and four in Dusseldorf.

The last flights departed Dusseldorf, Caracas and Santiago on January 6, 2003.



Reservation Centers



Because of a 25 percent year-over-year drop in call volume to United’s reservations line, the company on January 4, 2003, closed its reservation offices in San Francisco, Long Beach and Indianapolis. This was result in the furlough of 686 employees. United will continue to serve customers through its remaining nine reservations centers.



The company said that it will continue to look at every aspect of its operations and make changes that will ensure United continues to be a major player in the global airline industry.

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Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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