Date=3/12/2002

Type=CORRESPONDENT REPORT

Title=UNITED EXPANSION (L-O)

Number=2-287477

Byline=MICHAEL LELAND

Dateline=CHICAGO

Internet=YES

Content=

Voiced At:

Intro: The number-two airline in the United States says it is adding more flights and calling hundreds of workers back to their jobs. Chicago-based United Airlines was among the carriers that slashed thousands of jobs and flights after the September 11th terrorist attacks led to a sharp drop in passenger traffic. V-O-A's Michael Leland has more.

Text: United Airlines is currently flying about 20-percent fewer flights than it was before the September 11th attacks, and the jets it has in the air are, on average, 30-percent empty. The airline is gambling that offering more flights and cutting fares will help attract more business.

Aviation expert Joe Schwieterman at the Chaddick Institute for Metropolitan Development at DePaul University in Chicago says it is difficult to say whether United's move will pay off.

/// SCHWIETERMAN ACT 1 ///

Business really has not been that good on certain fronts. Pleasure traffic is rebounding, business traffic has been moderate, but United is rolling the dice [gambling] a bit that the recovery we are seeing is going to continue full-strength into the summer.

/// END ACT ///

Airline passenger loads have slowly been rebounding from the sharp drop after September 11th. But on Tuesday, the federal government predicted it will be at least next year before airlines carry as many passengers as they did before the terrorist attacks.

Like many U-S carriers late last year, United laid off about 20-thousand employees, cut about one-fourth of its flights and reduced fares to try to lure people back to the skies. The airline was already having money problems before the attacks, and Mr. Schwieterman says it is still losing about five million dollars a day.

/// SCHWIETERMAN ACT 2 ///

So much of that is attributable to depressed fares. That is the risk here, that traffic might rebound, but only at levels that are unprofitable regardless of how quickly they build the airline.

/// END ACT ///

United is focusing its expansion on its hometown and main hub, Chicago. It plans to add 77 flights a day at O'Hare Airport, including hourly service to big cities like New York, Los Angeles, San Francisco and Dallas. United officials say business travelers have complained loudly there were not enough flights being offered. This expansion is partly aimed at winning back that part of the market, which tends to pay higher fares because business travel tickets are not usually purchased very far in advance.

For leisure travelers, United's announcement could be good news for those planning summer vacations. It plans to cut fares by as much as 50-percent to some destinations.

The move could also touch off a fare war among the major carriers, which all tend to lower fares when one does. (signed)

NEB/MJL/PT