United Should Be Liquidated

Why the airline doesn't deserve a second chance
By Nick McMaster,  Newser Staff
Posted Aug 13, 2008 5:49 PM CDT
Jim Keenan, senior vice president of maintenance, United Airlines.    (AP Photo)
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(Newser) – What with the oil price spike, times are rough all around for airlines, writes Roben Farzad for BusinessWeek. But United presents a uniquely bungled case, and it is irresponsible to pity it along with other struggling players in the industry. "Even if the airline devised a way to run its 767s on oil from all the peanuts it has wrested from passengers, the institution seems almost culturally incapable of banking a profit," writes Farzad.

United has managed to squander gains made in the good times—such as the dot-com boom—and made terrible calls in the bad. After a 4-year bankruptcy, management finally started increasing efficiency in 2006, but rising fuel costs have since neutralized cost savings. Add its abysmal service and it's obvious the best course of action would be creative destruction: “Liquidate United and let stronger hands manage the pieces,” Farzad declares.