United's 'Ted' To Fly From Denver

United Airlines has reached a deal on a terminal extension at Denver International Airport, resolving a sticking point in the bankruptcy process at the world’s second-largest airline.

The airline also said it won rent concessions in return for temporarily conceding three gates to low-cost rival Frontier Airlines.

Separately, it has chosen the name “Ted” for its fledgling low-cost airline venture, sources familiar with the matter confirmed.

Denver has agreed to finance construction of a USD$50 million facility for United’s regional jets that will provide the airline 38 gates at the airport’s B-East concourse, Mayor John Hickenlooper said at a press conference in the city.

An antitrust investigation into United’s business practices in Denver was also settled and the city was assured higher utilization of its mainline gates.

The airline needs to re-negotiate leases with a variety of airports before it can exit bankruptcy.

“We have greatly reduced the capital construction costs that were planned at one time for the airport,” Hickenlooper said in a statement. “The old plans required us to spend over USD$300 million; the new plan, which extends the A concourse and provides a regional jet facility at the end of B, totals only USD$137 million — less than half of the original costs.”

Along with heavier reliance upon smaller regional jets generally as part of its bankruptcy reorganization, Elk Grove Village, Illinois-based United has also announced plans to start a low-cost carrier from Denver next year. It is trying to combat heavy competition from the likes of Frontier, which is eating away at its market share.

United spokeswoman Jean Medina said the deal with the city assures United will remain a major tenant at the Denver airport until 2025.

United will give up temporarily three gates of its eight A-concourse gate until October 2005, at which point it will get them back, Medina said. The A concourse at the Denver airport is more desirable because it does not require travelers to either walk or take a tram to the further B concourse.

Also over the weekend, sources familiar with the matter confirmed that United has chosen the name “Ted” for its fledgling low-cost airline venture, which will begin flying from Denver in February with four planes.

The branding campaign for the long-discussed venture, which represents just a small fraction of the United fleet and network, is just beginning to take wing in the western United States, with various marketing appearances of a character named Ted occurring throughout the city of Denver.

Ted, the latter half of the name “United,” is an experiment of sorts under United’s new Chief Executive Glenn Tilton, somewhat like Delta Air Lines’s low-cost subsidiary called Song. Song is already flying from the East Coast to Florida as Delta, too, tries to take back market share.

Major US airlines, which plunged into their worst financial crisis following the September 11, 2001, attacks, are struggling with cost issues and a general unwillingness on passengers’ part to pay the higher fares that were abundant in the late 1990s.

source Reuters