United Seeks Bankruptcy Protection Airline Tries to Reassure Customers, Suppliers

At least one airline chief executive, Continental Airlines' Gordon M. Bethune, has indicated he would be interested in acquiring some of United's assets.

Tilton said he has no plans to sell slots at Dulles International Airport, where United is the largest airline. "Dulles continues to be a very important hub for us. We're very pleased with the operations there," he said.

He also said United plans to reapply for a federal loan guarantees after the airline cuts more costs and is close to emerging from bankruptcy.

Tilton said he was not surprised that the Air Transportation Stabilization Board rejected the application. He knew it could be tough to get approval, he said, and thus had begun talks with bankruptcy experts. Kirkland & Ellis is United's bankruptcy attorney, and Rothschild Inc. is providing restructuring advice.

Tilton said he thinks a major United misstep was its answer to a question on how it would increase its revenue if it faced increased competition from low-cost carriers Southwest Airlines and JetBlue Airways. United responded that it would use the federal loan guarantees to help it fight off competition.

After the bankruptcy filing at 6 a.m. yesterday, Tilton rushed to O'Hare, hugging passengers and shaking hands, encouraging them to continue to fly on his airline and promising they would not see any major disruptions in service.

Tilton said he plans to lead the effort to keep customers flying. "This is the most appropriate place for me to be," said Tilton, who has spent much of his career in marketing before becoming vice chairman of ChevronTexaco Corp. "It's about the customer, the customer, the customer. I'm the number one salesman for this company."

Tilton's earlier career gave him experience with bankruptcy. In 1987, Tilton was a top manager at Texaco when the oil company reorganized. But this bankruptcy is different from Texaco's, he said, because United will have to change dramatically by reducing costs and streamlining operations.

Some industry experts are skeptical that someone from outside the industry will understand the business well enough to be able to resuscitate the airline, but others say an outsider could bring a fresh perspective.

Another critical element of the reorganization will be the employees, who gave up millions of dollars in 1994 in exchange for 55 percent ownership of the airline. Now their shares, which hit a high of about $100 in 1997, are worthless.

Staff writers Kari Lydersen and Jonathan Finer contributed to this report.