The new chairman of Allegis Corp. -- brought on board to oversee the dismantling of the travel-services empire that includes United Air Lines, the Hertz Corp., and the Westin and Hilton International hotel chains -- said yesterday that bidding for the company's assets will not begin before September.
Frank A. Olson, the chairman of Hertz, took over as chairman and chief executive officer of Allegis last month when the company's board agreed to accept the resignation of former chairman Richard J. Ferris and to reject Ferris' attempts to hold together an integrated travel-services corporation. Instead, the board decided to auction off the corporation's nonairline assets and indicated that it will rename the company United Air Lines Inc.
Since then, Allegis also has announced that it will sell up to 50 percent of the airline's computer reservation system to help finance a cash distribution to shareholders without going deeper into debt. Olson also has taken over as president and chief executive officer of the airline.
Olson met with airline-industry analysts in New York yesterday. Analysts who attended the meeting said there were few surprises, but that Olson made a favorable impression.
"He's quiet-spoken but very decisive," said Robert J. Joedicke of Shearson/Lehman Bros. Inc. "He moves rapidly. He doesn't sit and meditate. He came across as an in-charge individual who knows his company's problems."
"He came across as quiet and soft-spoken, but I think there is a no-nonsense manager there," said Hans Plickert, an analysts with E.F. Hutton.
Allegis also reported yesterday that it earned $73.4 million ($1.29 a share) on consolidated operating revenue of $2.88 billion in the second quarter of 1987.
United Air Lines had operating revenue of $2.07 billion, up from $1.82 billion in the second quarter of 1986. Net earnings were $68.6 million, compared with $10.4 million in the second quarter of 1986.
Analysts said the earnings reflect strong air traffic, improved yields resulting from somewhat higher fares, and that United's Pacific division is in better operating order.
They also said that the release of the earnings, along with Olson's appearance in New York, were intended to send the message that United has not fallen into chaos..
That turmoil began in April when United's pilots put the company into play by offering to buy the airline. The pilots still are pursuing their hopes to acquire the airline and have been meeting with investors and brokers in New York. In part, the Olson meeting with analysts appeared to be an attempt to provide a counter to those presentations, analysts said.
Allegis has said it opposes the pilots' proposal, which is also opposed by the International Association of Machinists and Aerospace Workers and some other employes.
Many potential buyers have expressed an interest in the assets that the company is selling, Olson told the analysts. But the bidding cannot begin until Allegis is able to put together comprehensive information on the companies to allow prospective buyers to calculate their bids. The process might take awhile, delaying any cash payout to shareholder until as late as the end of the year or early next year, Olson told the analysts, according to several who attended the meeting.
One possibility that has been mentioned is that Hertz management might put together a leveraged buyout of the auto-rental firm. Olson told analysts yesterday that he is not involved in any such effort.
He said that an executive search committee headed by Allegis board member Neil Armstrong is looking for a permanent replacement for Ferris and hopes to complete that process in 90 days.