United's Financial Turbulence Hits Business Sections

As United Airlines struggles to exit from bankruptcy, reporters struggle to make sense of it all. After three failed attempts to secure a $1 billion federal loan, United announced a five percent increase in international fares on June 30. The airline cited rising fuel costs as the leading factor.

The significance of this story lies in the fact that it isn't over, and will not be for some time. This is especially true for Yunmi Choi at the San Mateo Daily Journal who says that United is one of the largest employers in San Mateo County. Choi said via e-mail the biggest challenge is localizing the story for the 10,000 United employees in the county, in addition to retirees and employees laid off since Sept. 11, 2001. She indicated this approach helps convey the day-to-day impact as major developments unfold.

While most publications reported on the news generally, Choi addressed specifically how United employees would be affected by the loss in the wake of numerous concessions they have already allowed.

"It is always helpful to talk to company and union representatives to better understand the impact of financial statements, deals and/or contracts," Choi said. "You see things from the perspective of how contract terms translate into people's lives or into the overall financial strategy of the company."

Forecasting what employees would look for, Choi reported that one official for the International Association of Machinists and Aerospace Workers "doesn't think management is eager to hit up its employees again."

James Bernstein of Newsday analyzed the impact that could result from the next step of cost cutting. If United is successful in lowering costs enough, it will stand to be a more formidable competitor. But the talks could take a turn and lead to strikes and service disruptions.

Bernstein also addressed the influence that United's actions will have on other airlines dealing with similar financial crises. Exploring the next steps -- and their consequences -- is crucial to the health of other managements in the industry.

Riva Atlas of The New York Times maneuvered a different angle on the story by including specifics on other sources United could rely on, and affect -- namely J.P. Morgan Chase. She also took the approach of addressing what United's bankruptcy means for other companies.

Atlas reported that "the spotlight will shine brightest on J. P. Morgan, which has a history of rescuing companies viewed by the financial markets as hopeless cases." Going further, Atlas included news of J.P. Morgan's merger with Bank One Corp., which has a great deal invested in United's highly profitable credit card program, losing big if United should go under.

Though it is clear that there is uncertainty surrounding United's next move, tuning in to the little things will be central in determining the airline's fate.