if they can't stop hemorrhaging money. I'll provide the full text of the article since it'll disappear tonight. I have mixed opinions about this. First, I hate United Airlines due to the terrible service I've had on so many of their flights. I once told my company travel agent to only book me on United if the only other choice was Aeroflot or Air Yak. On the other hand, if United closes, it'll have huge ripple effects in the economy. Already, one American jet engine manufacturer announced 5,000 layoffs yesterday.

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United will die if losses don't stop, CEO says

The Associated Press

CHICAGO -- United Airlines' chief executive James Goodwin says the carrier "will perish" sometime next year if it cannot soon stem huge losses that have worsened dramatically since Sept. 11.

His comments came in a letter to employees, obtained Tuesday as United continues to slash its schedule and work force to cope with the drastic decline in air travel caused by last month's terrorist attacks.

"Before September 11 we were not in a comfortable financial state, with costs exceeding our revenue on a daily basis," Goodwin wrote. "Today, the situation is exacerbated with costs exceeding revenues at four times the pre-September 11 rate. Today, we are literally hemorrhaging money.

"Clearly this bleeding has to be stopped -- and soon -- or United will perish sometime next year."

United is the dominant carrier at Denver International Airport, where it runs a regional hub. It also operates 13 flights daily in and out of Colorado Springs, the most of any airline.

Even with a $15 billion industry bailout, airline officials have speculated that bankruptcy was imminent for weaker carriers, although they did not name them.

"We're so far away from break-even that it's not even worth calculating," David Swierenga, chief economist at the Air Transport Association, said last month after the bailout was approved.

United spokesman Joe Hopkins confirmed the contents of the letter, written last week and first reported earlier Tuesday by the industry publication Air Transport World. He said it had not yet been distributed to employees and was leaked prematurely.

Even before the attacks, the nation's second-largest airline was projected to lose $1 billion this year because of the economic slump, a fall-off in business travel and lingering labor and service woes. United is more dependent on business travel than other major airlines, and subsequently has suffered greater losses both before and after the attacks.

Last week, United said financial losses stemming from the attacks and subsequent grounding of its fleet probably will exceed the company's share of aid coming from a federal bailout package -- so far, $390 million of an expected $800 million.

Glenn Engel, an analyst for Goldman Sachs, said the airline industry is losing a combined $50 million a day even with a recent recovery in air travel. A lot of airlines could run out of cash before the end of 2002 without more improvements, he said, although they could still operate from bankruptcy while awaiting a turnaround.

"I'd be shocked if United perishes a year from now," he added.

Another analyst, Helane Becker of the Buckingham Research Group, said Goodwin's scenario rings true and probably applies to every major U.S. airline.