United Cargo Up And Running

Early Spring For United

     “I am all about changing the way a big American legacy airline conducts its air cargo business,” declares Scott Dolan, Senior Vice President, United Airlines and President of United Cargo.
     “Change is about execution in service delivery, the process of utilizing our assets and accountability.
     “We are examining and improving every aspect of our business while also talking to our customers, so there is no doubt what they want and are willing to pay for.
     “United has 120 wide-body cargo friendly Boeing aircraft and a great route network that will only get better as we forge new agreements with carriers around the world.”
     Later this year when the NASDAQ stock exchange lists United Airlines, the symbol to purchase or follow trading will be UAUA. .
     “United returns this week, and despite some gripes, mostly from competitors, the long winter of the second biggest airline in the world is officially over.
     The sharp Lake Michigan winds that sweep the streets of Chicago may be cold on the shoulder for a little while longer, but at the headquarters of United in nearby Elke Grove, Illinois the company is finally casting off bankruptcy protection to walk out into the sunshine, and it might as well be spring.
     Since 9/11, the story of United Airlines reads like some epoch novel, full of twists and turns and not a small amount of uncertainty.
But here, like some Hollywood epoch emerging from a tough battle with thoughts of better days ahead, is a “new” United Airlines, a lean machine with less debt, employees and aircraft.
     With banks pledged for up to $3 billion in financing and costs excluding fuel (trimmed to about 20%), the carrier is stepping out boldly, almost doubling its service to Mainland China as part of a run-up to new overseas destinations served, which now stands at 44 as compared to 34 just a few years ago.
     United Airlines is expected to turn a profit as early as this year and will expand its Washington Dulles International Airport operations, where national and international flights are delivering a “surprise upside” according to Chairman Glenn F. Tilton.
     United also has hubs at Chicago, San Francisco, Los Angeles and Denver.
     United envisions Dulles as its gateway Atlantic, serving overseas destinations like Frankfort, Munich, and South Africa, as well as the Caribbean, Mexico and Latin America.
     At Dulles United is already the biggest carrier, with 284 flights to 83 cities, and it will continue to emerge as a major connecting point from the West Coast.

     United plans to expand its low cost entry Ted and is bucking the U.S. legacy airline trend by keeping leg room pillows and blankets on flights.
     “You can’t punish the passenger. It wasn’t their fault we were having such financial problems,” Tilton said.
     However, anybody who thinks that United Airlines Chapter 11 bankruptcy reorganization was some kind of walk in the park should sit for a few minutes with the President of Air Cargo, Scott Dolan.
     Scott Dolan has the distinction of holding the post as the carrier’s first President of Air Cargo. When he got the job in May of 2004, he openly declared that he wouldn’t be the last to fill the position.
     Scott Dolan is a determined, tough, no nonsense manager who is up to big things at United Cargo, including the recently finished top to bottom reworking of the carrier’s air cargo business.
     In 2003 there were over 3,000 employees working at United Worldwide Cargo. Today, there are just over 375.
     But those smaller numbers delivered more than double the fully loaded contribution (or profit) in 2005 as compared to 2003.
     Mr. Dolan has set his sights on doing even better in 2006.
     “For the past few years our view has been split between satisfying our customers and dealing with bankruptcy.
     “Now, we can turn our complete attention toward bettering our air cargo business.
     “We will not go back or retreat from the sense of purpose that was driven by our situation during the past years.”
     “Right now, we are continuing to maximize our assets and improve service delivery while also driving new air cargo alliances to provide even more shipping options to our business partners.”
     As to whether all air cargo aircraft are part of United Cargo’s future, Scott Dolan says:
     “We have to earn the right to bring freighters into our product mix.”
     The look on his face and even his body language betray his uncertainty on the matter; the all-cargo option will be realized sooner than later.
     “Our first job is to continue with the good work we’ve already done to reach our all time high for service delivery.
     “In the past we have not done such a good job on quality, but we have progressed, we think, to the service levels we were at when we outsourced our handling a few years ago.”
     That outsourcing saved about $90 million annually, (warehouse handling and call center) but at the same time a huge dent was applied to United’s reputation.
     “The main focus of our turn-around plan has been to get our process right and to clear the channels for open dialogue with our own people, our service providers and our customers as well.
     “Everyone needs to know what to expect.
     “Cargo is about 5% of the throughput here at United.
     “It speaks volumes that Chairman Tilton brought me here and raised the level of my job to President.
     “The new United Cargo is an open and dedicated business where everyone from sales and marketing people to handling facilities and shippers can feel they are most important.”
     On tap is our revamped product roll out starting in March.
     “We have spent time examining all our product offerings with an eye toward maximizing their value to the market place.”
     Scott Dolan says that he spends about half his time traveling to join staff in order to make joint customer visits.
     “We have our 14 large international logistics partners but the lion’s share of our business is driven by our forwarder relationships.
     “My mission is to get to every station where we deploy a widebody aircraft and spend time with our people and their customers.”
     Scott Dolan concedes that he never envisioned being posted at the top cargo job of the second biggest air transportation company in the world.
     Dolan in his late 30’s with a life style that has seen a change of address every few years keeps in shape despite a half year on the road eating and sleeping by spending as much off time as possible as a long distance runner.
     He recently competed in a half marathon (13K) in Dallas, finishing 185 in a field of more than 4,000.
     At United he is responsible for the cargo division, which includes Sales & Marketing, Finance, operations, product quality and customer service.
     He is a part of a group of executives that moved into critical posts at the top of the carrier during its time of greatest challenge.
     Mr. Dolan arrived at United from the position of Senior Vice President and Chief Operating Officer for Atlas Air Worldwide Holdings, where he was responsible for the day-to-day operations for both Atlas Air and Polar Air Cargo.
     At Atlas/Polar he guided the company through a similar bankruptcy situation.
     “I guess I live to work,” he smiles.
     That’s what you notice about Scott Dolan right away.
     He is a tough guy with a determined mind who answers a question by prefacing answers with the word “so,” as if he has a response catalogue for anything you might wonder about.
     Scott also has this great smile that lights up his face, showing an irresistible human quality and warmth.
     He is riding the rocket and he knows it, and apparently having a hell of a good time doing it.
     “I knew that I was destined for top management and this kind of challenge in my professional life; I just didn’t envision it happening at an airline.”
     United Airlines of Middle America was central to the creation of the United States commercial airline business more than 80 years ago.
     United flew the first coast-to-coast all-cargo flights from LaGuardia to Los Angeles in 1940 aboard DC3s (dubbed Cargo Liners), just prior to World War II.
     The name Cargo Liners stuck until United’s last all cargo fleet (DC8 aircraft) was retired in the late 1970’s.
     An attempt to return to freighters with DC10s during the late 1990’s was short lived.
“Wrong aircraft, wrong time,” Mr. Dolan notes.
     “Anybody can fly freighters and lose money. That’s not going to happen here.
     “United spent three long years in Chapter 11, to ensure once we exit, we will never have to return again.
     “We are all glad that it is over as we look forward to the exciting possibilities ahead.”
(Geoffrey Arend, Edited by Flossie Arend)