Chicago is My Home

22
Jul

United’s UAL Corp. to Slash 5,500 More Jobs, Bolster Available Cash Flow

Author: Adam Fendelman, Category: Travel

CHICAGO – United Airlines parent company UAL Corp. announced on Tuesday steps to bolster its cash strength and cut its staff following $2.73 billion in second-quarter losses.

UAL attributed the losses, which were lower than predicted by some analysts, to non-cash accounting charges and high fuel prices. UAL says it has reached an agreement to extend its contract with Chase, which is United’s co-branded bank-card partner, that will give the airline access to a $1.2 billion cash flow.

The company also announced on Tuesday plans to further reduce its staff by 5,500 in the next 18 months. During the second quarter, UAL said it would cut 1,500 salaried and management jobs. UAL shares rose more than 50 percent on Tuesday following the company’s announcement.

By Megan O’Neil

08
Jul

O’Hare Airport Ranks Last For On-Time Departures For Five Months in 2008

Author: Adam Fendelman, Category: Travel

CHICAGO – Are you catching a flight from Chicago’s O’Hare International Airport any time soon? Plan on a delayed departure.

Just 63.2 percent of flights out of O’Hare got off the runway on time between January and May in 2008, according to the U.S. Department of Transportation’s monthly Air Travel Consumer Report. Out of 32 metropolitan airports, O’Hare ranked last for on-time departure and No. 30 for on-time arrivals.

Particularly untimely were the months of January, February and March as an unusually snowy winter disrupted air traffic in the Midwest. Out of 19 carriers, UAL Corp’s United Airlines finished second to last for on-time performance with 72.4 percent of its flights arriving on time.

Chicago’s other airport fared slightly better.

Midway International Airport finished No. 5 for on-time departures for the first five months of the year but No. 27 for departures. Flights in and out of O’Hare have actually been reduced in recent weeks as the airport’s major carriers – United Airlines and American Airlines – make deep cuts in their flight itineraries.

By Megan O’Neil

16
Jun

FAA to Lift Hourly Flight Cap at O’Hare International Airport Starting on Oct. 31

Author: Adam Fendelman, Category: Travel

CHICAGO – O’Hare International Airport, which is one of the nation’s most heavily trafficked airports, is about to get even busier. The Federal Aviation Administration (FAA) said on Monday it will lift an hourly cap of 88 flight arrivals at O’Hare and allow for an additional five flights an hour (or 70 flights a day).

The change will take effect on Oct. 31, 2008 and coincide with the opening of a new runway at O’Hare that’s scheduled for November. Speaking on Monday following the announcement, Chicago mayor Richard Daley said the city remains committed to a thorough overhaul of the airport to be completed by 2014.

Major delays at the Chicago hub brought the addition of flights into question. A severe downturn in the airline industry, however, has prompted the FAA to ease restrictions with carriers and airports.

By Megan O’Neil

12
Jun

United Follows American’s Example of Charging $15 For First Checked Bag

Author: Adam Fendelman, Category: Travel

CHICAGO – Are you looking forward to booking a summer getaway? Plan on packing light.
UAL’s United said on Wednesday the airline will begin charging customers $15 each way for the first checked bag and $25 each way for the second checked bag. The new policy is effective for tickets purchased on or after June 13, 2008.

United’s announcement follows a similar move by competitor American Airlines, which announced in May 2008 that it will implement the same $15 baggage fee.

Struggling with record-high fuel prices, many airlines are installing a variety of strategies to increase revenue and cut operational costs. Other such measures have included grounding inefficient planes and reducing staff. In addition, the airline industry (and particularly United) has been abuzz with speculation of possible cost-saving alliances or mergers.

“With record-breaking fuel prices, we must pursue new revenue opportunities while continuing to offer competitive fares by tailoring our products and services around what our customers value most and are willing to pay for,” said United COO John Tague in a Wednesday statement.

By Megan O’Neil

04
Jun

United Announces Major Reductions, Cuts 1,100 Jobs, Grounds 100 Planes

Author: Adam Fendelman, Category: Travel

CHICAGO – The skies grew cloudier on Wednesday at UAL’s United Airlines as the carrier said it will cut 1,100 additional jobs and ground 100 inefficient airplanes in an effort to shore up company losses.

United CEO Glenn Tilton called the decision aggressive but necessary in light of rising fuel prices and a softening market.

“This environment demands that we and the industry act decisively and responsibly,” Tilton said in a Wednesday statement. “At United, we continue to do the right work to reduce costs and increase revenue to respond to record fuel costs and the challenging economic environment.”

Tilton says current fuel prices are costing United $3 billion in additional operating costs. The company hopes the changes it has put in motion will pull United out of the red by 2009.

United’s reductions follow similar cuts being made by its competition. On May 21, 2008, American Airlines announced it will trim domestic flights by as much as 12 percent and retire 75 fuel-guzzling planes.

By Megan O’Neil

02
Jun

Report: Airline Industry to Lose $2.3 Billion in 2008 Due to High Crude Oil Prices

Author: Adam Fendelman, Category: Travel

CHICAGO – The airline industry will lose $2.3 billion internationally in 2008 due to the unprecedented rise in the price of crude oil, the International Air Transport Association (IATA) announced on Monday.

The IATA, which represents more than 230 airlines worldwide, in March 2008 predicted a $4.5 billion industry profit based on oil prices of $86 per barrel of crude oil. Monday’s prediction was based on a revised $106.5 per barrel estimate.

Chicago airlines and Chicago’s O’Hare International Airport and Midway International Airport have been hit hard by the fuel increases and industry contractions. UAL’s United Airlines has trimmed its work force, raised round-trip fares by as much as $60 and continues to explore merger options.

American Airlines, which uses O’Hare as a major hub, says it will start charging customers for their first checked bag and will reduce and eliminate several Chicago-based flights in the coming months.

For every dollar increase in the price of fuel, IATA CEO Giovanni Bisignani says the airline industry’s operating costs increase by $1.6 billion. He says conditions could still worsen as oil has been trading for as much as $135.09 a barrel.

By Megan O’Neil

28
May

American Airlines Makes First Cuts: Ends Routes to Buenos Aires, Honolulu

Author: Adam Fendelman, Category: Travel

CHICAGO – American Airlines in Tuesday and Wednesday statements said it will eliminate several routes (including Chicago to Buenos Aires and Chicago to Honolulu) as part of a 12 percent operational reduction the carrier announced on May 21, 2008.

American says flights between Chicago and Buenos Aires will stop on Sept. 3, 2008. The carrier says flights between Chicago and Honolulu will be reduced starting on Sept. 3, 2008 and will stop entirely on Jan. 5, 2009.

Other cuts include the carrier’s flight between New York’s John F. Kennedy International Airport (JFK) and London’s Stansted Airport (effective July 2, 2008) and its Boston to San Diego flight (effective Sept. 3, 2008). American says it will also restructure operations between the U.S. and various Caribbean islands including (Puerto Rico).

American parent company AMR says the airline is under intense financial pressure due to high fuel prices and a weak U.S. economy. AMR says it will make additional reductions in the coming weeks.

By Megan O’Neil

27
May

AAA Report: High Fuel Prices, Airline Tickets Affect Holiday Weekend Travel

Author: Adam Fendelman, Category: Travel

CHICAGO – With skyrocketing gas prices and increasingly expensive airline tickets, travelers found there were few cheap transportation options over the holiday weekend.

Drivers in Chicago and the surrounding suburbs paid well in excess of $4 a gallon for gasoline, according to the American Automobile Association (AAA) fuel tracker. The national average at the pump hovered at $3.93.

While the U.S. Department of Energy has not yet released data detailing fuel demand over Memorial Day weekend, experts anticipate it will show that road travel was down during the traditionally busy three-day stretch.

Air travelers also faced heightened costs as UAL Corp.’s United Airlines hiked prices by as much as $60 on Thursday to combat record fuel prices. American Airlines and Delta Air Lines quickly followed suit by announcing their own fare increases on Friday.

By Megan O’Neil

15
May

United Airlines Weighs Possible Merger, Alliance Options at Latest Meeting

Author: Adam Fendelman, Category: Travel

CHICAGO – UAL Corp.’s board of directors will meet on Thursday and industry insiders say there will be three options up for discussion: pursue a full-blown merger with US Airways, negotiate an alliance with Continental Airlines or continue to operate on its own.

Embattled with rising fuel prices and fierce competition, the airline industry has anticipated a United merger since Delta Air Lines and Northwest Airlines announced on April 15, 2008 that they would join together.

Led by CEO Glenn Tilton (a strong proponent for consolidation in the airline industry) United has courted various potential partners. Top on its list was said to be Continental, but the Houston-based carrier backed out of talks on April 27, 2008. United then turned to its less-compelling second choice – US Airways – and negotiations for a potential deal are ongoing.

In the hours leading up to Thursday’s board meeting, however, various news sources reported that United has not completely abandoned hope of creating some sort of operational relationship with Continental.

Citing unnamed and inside sources, Bloomberg and the Associated Press have reported that United may now try to form an alliance with Continental that would allow the two carriers to increase revenue without the headaches of a formal merger. An official decision is not expected to be made at Thursday’s board meeting.

By Megan O’Neil

15
May

CTA to Pick Up Speed on Brown Line Construction at Fullerton, Belmont Stops

Author: Adam Fendelman, Category: Travel

CHICAGO – The Chicago Transit Authority (CTA) will inject $1.6 million into the Brown Line construction project in order complete the track realignment six months early, CTA officials said on Wednesday.

Southbound Brown, Red and Purple Line trains were routed onto one track at the Belmont and Fullerton stations starting on March 30, 2008 as the CTA rebuilt platforms and reconfigured tracks.

The project, which has slowed travel for tens of thousands of riders, was not scheduled to be completed until well into 2009. However, CTA President Ron Huberman says the cost of accelerating the pace of work will be offset by increased ridership and operational savings.

“Accelerating the construction schedule will cost $1.6 million. That will come out of capital funds for the Brown Line project budget,” Huberman said in a Wednesday statement. “It will reduce our operating costs since we are currently providing supplemental bus service and have additional staff deployed to the corridor to support a three-track operation.”

By Megan O’Neil