Philip M. Condit
chairman & ceo, the beoing company
Boeing's Leader Predicts Effect of (UAL) Bankruptcy
A move into bankruptcy by United Airlines' parent company could have profound effects on the airline industry if UAL Corp. successfully nullifies current United labor contracts, the head of Boeing Co. said yesterday.
"If they choose to abrogate all their labor contracts and redefine labor costs, then that will dramatically lower their costs of operation and put pressure on other airlines," Philip Condit, Boeing's chairman and chief executive, told Boston College's Chief Executives Club of Boston. "I believe we're going to have a period of restructuring, and I think it could be pretty dramatic."
The head of the world's largest commercial aircraft maker said the structure of the economically vital airline industry needs a hard look. An industry not earning the cost of its capital isn't a good business proposition, Condit observed. Pointing to the fragmented nature of an industry where the largest airline has just 6 percent market share, Condit said, "You will normally, under those circumstances, see consolidation."
Article by Donna Goodison
Friday, December 6, 2002