UAL Names New Leader, Dutta And Studdert Resign

UAL Corp., parent company of United Airlines, yesterday named industry newcomer Glenn F. Tilton, 54, its new chairman, CEO and president, replacing John W. Creighton. Tilton, most recently vice chairman of ChevronTexaco Corp. and interim chairman of Dynegy Inc., assumed command immediately.

Tilton has many high-priority tasks in front of him, notably the formation of a new executive team. Both Rono Dutta, UAL president, and Andrew E. Studdert, UAL COO, resigned from their posts after months of criticism from United employees. The company said other executives will assume those duties in the interim.

More importantly, Tilton must bring the company back from the brink of bankruptcy or restructure within it. In either case, he will have to reach concession-laden labor agreements with employee unions, try to convince the Air Transportation Stabilization Board to grant the airline $1.8 billion in federally backed loan guarantees and fix the company's broken revenue model.

The company's labor unions expressed initial optimism and a willingness to work cooperatively with Tilton. United's employees own 55 percent of the company and hold two seats on the board of directors.

Tilton must work quickly. He faces a Sept. 16 deadline, by which he must forge new labor agreements in order to resubmit the company's loan application to ATSB. An earlier recovery plan called for $1.5 billion in annual labor cost reductions, a proposal largely rejected by union leadership.

Also on Tilton's plate is a new codeshare partnership with US Airways still under review at the U.S. Department of Transportation.

Creighton--a UAL board member who was asked last October to take the top spot on an interim basis after his predecessor James Goodwin resigned under fire from United's powerful labor unions--is retiring.