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United isn't the first great airline to fall on hard times. Does anyone still remember Eastern? Or the glory days of Pan Am?

By Patrick Smith
Published December 10, 2002 8:30PM (EST)

"Rising" was the corporate slogan used by United Airlines in recent years, though I suspect the campaign has been dispatched with. Just as well, as I always found it an irritating tag and missed the old "friendly skies" bit.

But when I think of United, one of the first things that comes to mind is a TV ad the company ran in the mid-1990s, focusing on its newest Latin American destinations. The commercial featured a parrot, which proceeded to peck out George Gershwin's "Rhapsody in Blue" on a piano. It was clever, and it reminded me of the erudite stylings and global reach of an airline that, at the time, I so badly wanted to work for. "Rhapsody" remained United's corporate theme music for several years, tinkling along as a dramatic backdrop to its television spots.

On Monday, at its home base in Chicago, United Airlines, which was founded in 1931, became the largest transportation entity ever to file for bankruptcy protection. The news was received by those within the aviation industry with no less mouth-agape incredulity than that of a widebody being commandeered into a skyscraper.

That already happened, of course, and that awful day has become the touchstone for aviation's worst-ever stretch of financial anguish, a 14-month run of unprecedented losses, which in United's case were topping $8 million per day, culminating in the Monday morning announcement of Chapter 11. Most frighteningly, this is perhaps not yet the nadir of the industry's woes, as the other major airlines, albeit with more short-term cash on hand than United, wrestle with comparably dismal numbers. And United's filing comes on the eve of the midwinter lull, traditionally the lowest yield months even in the best of times.

Two of the nation's five largest airlines are now flying in bankruptcy. Already it seems we've forgotten US Airways, which submitted its Chapter 11 paperwork back in August.

Barely half a decade ago, with United's stock reaching more than $100 per share, the airlines were basking, if not gloating, in the largest profits and highest passenger totals in history. The upturn/downturn cycle is nothing new, really, but this time the highs were higher and the lows are much lower, a symptom, one would think, of something desperately awry with the business models our airlines have historically relied upon. Meanwhile, the Southwests and JetBlues persevere -- expanding, hiring, bringing in profits and causing the big boys to fidget even more nervously.

With 80,000 employees (already down from nearly 93,000 in 2001), and 1,800 flights each day (for now), United ranks as the world's second-largest airline, just behind American. While the biggest ever to seek protection from the courts, it nonetheless has plenty of company, from a slew of short-lived upstarts to storied international icons like Swissair and Sabena.

Or consider Eastern, which at its peak in the late 1970s was the planet's largest carrier outside the Soviet Union. Dismantled by the infamous Frank Lorenzo, Eastern also disappeared in the early 1990s. Braniff too, after its 747s had once called port everywhere from Singapore in the East to Frankfurt in the West. TWA, of course, operated in and out of bankruptcy for many years before being absorbed, some token dignity intact, by American last year, while Continental has lived to tell of two separate filings.

But most eerily, one can't help but recall the demise of Pan Am, a company whose blue globe trademark was known the world over with nearly as much brand recognition as Coca-Cola. Pan Am ceased operations forever in December 1991.

Interestingly, and although the UAL bosses in Chicago will be loath to acknowledge the omen, much of United's international territory came by way of Pan Am, which in the 1980s began selling its more valuable assets to remain afloat. It was United that took charge of Pan Am's vast Pacific network in 1985. Those were the routes on which Pan Am had made its name -- the stuff of great lore and prestige, going back to the days of its flying boats. (I recall the odd sight of United 747SPs, hand-me-downs that I'd only ever seen in the blue-and-white colors of Pan Am, flying New York to Osaka.)

Later United purchased Pan Am's Heathrow slots, as well as much of its Latin American operations. Such new theaters gave United, theretofore a chiefly domestic player, the chance to provide, as is today emblazoned proudly on the side of its jets, Worldwide Service.

Thus, a fire sale of United's routes would be a sad irony indeed, but then the history of commercial aviation is full of such instances of geographic cannibalism. Time will tell, but can we already hear salivating in the boardrooms of American and Continental, as executives eye United's giant hub at Tokyo/Narita?

Or, as the company insists, will nothing change? Seamless "worldwide service" from profits through staggering losses to profits again? Perhaps, and we're reminded of Continental, which twice endured the distress and stigma of Chapter 11, last emerging in 1993 fully intact. Today, Continental is considered by many to be the best major airline in America, in terms of both management strategy and passenger service.

Which isn't to say that Continental isn't worried also. That airline's chairman reminds us this is not your father's downturn, and the current state of affairs is immeasurably meaner than the post-Gulf War dregs of 1991. "United isn't too big to fail," suggested Gordon Bethune in a recent interview, worried as much about his own company as anybody else's. "They'll just make a bigger hole when they hit the ground." Somewhere, Juan Trippe, Pan Am's visionary founder, is sucking his teeth in agreement.

Either way, one or two things need stressing: Already passengers are e-mailing this author, seeking reassurance that a bankrupt airline is a safe airline. And the answer is, more or less unconditionally, yes. Remember, United has much to lose should any mishap occur, and while it may not be recruiting celebrity chefs to design a new first-class menu, I guarantee it won't be skimping on maintenance or inflight safety to save a few dollars. Pilots know this, and you should, too.

Whether its frontline employees are demoralized to the point of driving customers away, however, or energized to success by the challenges of survival, remains to be seen.

Never before has the industry been so decimated, and neither has it been so emotionally cutthroat, with many laid-off workers viewing the pain of one airline as the pleasure and good fortune of another. The principles of competition and industrial Darwinism have hit new heights -- or maybe lows -- of ferocity. But with each of the remaining majors clinging precariously to solvency, maybe this isn't so shocking.

Some of us try to see it differently, looking at our colleagues in the context of history and assuming we'll all get through this mess with our careers and corporations intact. As a pilot I remember the parrot playing Gershwin, and the sight of captain Al Haynes crash-landing his crippled DC-10 in Sioux City in 1989.

Haynes and his crew survived, and I figure his airline will, too.

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Patrick Smith

Patrick Smith is an airline pilot.

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