Paul Holmes 14 Dec 2002 // 12:00AM GMT
NEW YORK—United Airlines parent UAL Corporation, which declared bankruptcy on Monday, has asked U.S. bankruptcy Judge Eugene Wedoff to approve a team of advisors including Omnicom-owned public relations agency Gavin Anderson & Company.
The U.S. Bankruptcy Court in the Northern District of Illinois is overseeing the operations of UAL, and the company had to apply for court permission to retain five law firms, three restructuring advisors, an auditing firm, a management consultant, a claims agent and Gavin Anderson as its public relations firm.
UAL is seeking approval to hire Gavin Anderson for crisis communications for an initial fee of $50,000 and $15,000 a month, plus expenses.
“You don’t want to hire a general practitioner to do this kind of surgery,” said Hugh Larratt-Smith, a director of the Turnaround Management Association, a 5,500-member trade group of restructuring advisors, defending the high cost of the various advisors. “The fees may be on the upper scale of the profession, but it’s not a game for rookies.”
The company got good reviews for its early announcement, after chief executive Glenn Tilton spoke at O’Hare International Airport on Monday, shortly after United filed its bankruptcy papers in federal court.
“United is flying, and we are focused on our customers,” says Joe Hopkins, a spokesman for the company. “We can restore profitability.”
The airline ran two newspaper ads nationwide to reassure customers that their travel plans—and frequent flier miles—would be unaffected by its financial troubles. But it will cease traditional advertising until its new branding campaign is ready to begin sometime in the next quarter. It will depend on e-mail messages and direct mail to its most loyal customers, as well as an increased emphasis on public relations.
“If we need to come back and aggressively defend our position in the marketplace, we will absolutely do that,” said Jerry Dow, director for worldwide marketing communications. “There’s no sense in dwelling on the realities of Chapter 11. We’re ready to move on as fast as we can.”