UAL Seeking to Replace United’s Interim CEO

In a move that could complicate United Airlines’ effort to recover from huge losses, United parent UAL Corp. said Tuesday that it has begun looking for a replacement for interim Chairman and Chief Executive Jack Creighton.

Creighton, 69, was tapped to head the nation’s second-largest carrier last fall after his predecessor, James Goodwin, resigned under pressure from United’s powerful labor unions. Creighton, a UAL director and former paper-company executive, took the job on a temporary basis and no timetable was announced for finding his successor.

The decision to seek his replacement now comes at a critical time. After losing $2.1 billion last year and an additional $510 million in this year’s first quarter, UAL and Creighton had just stepped up efforts to persuade employees--which own 55% of UAL--to grant cost concessions to help the airline rebound.

But the response has been mixed. The pilots union, the Air Line Pilots Assn., said last week that it was willing to discuss the cuts, but the Assn. of Flight Attendants said it isn’t interested in agreeing to concessions.

Meanwhile, United continues to lose money as it grapples with the downturn in air travel, a huge debt load and some of the highest operating costs in the business.

“It would be hard to imagine making matters any more complicated, but this will,” Ron Kuhlmann, vice president of aviation research firm Unisys R2A, said of Creighton’s pending departure. “It’s a dysfunctional family at this point and nobody seems to be able to look beyond their own purview.”

Creighton said in a statement that he “was brought in for the short term to stabilize United and improve the relationship between management and employees.”

“We have made some important strides in each of these areas, and I will continue to focus on those priorities as we search for my replacement,” he said.

Creighton reached two new contracts with the International Assn. of Machinists, one covering 13,000 mechanics and utility workers and the other 25,000 ground workers. The union had wanted those pacts secured before considering any concessions. ALPA spokesman Pat Palazzolo said the pilots union is “grateful to Jack for his interim service,” and that it “applauds the decision by the company to move ahead and find permanent management.”

“This is one step in United’s recovery that employees have been looking for,” Palazzolo said.

UAL said it hired executive-search firm Russell Reynolds Associates to find a CEO, but didn’t indicate when the change might be made.