Former ATA exec faces daunting task at United

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Former ATA exec faces daunting task at United
By Marilyn Adams, USA TODAY

Right in the thick of the airlines' financial crisis, John Tague is taking=
=20
on one of the most daunting jobs in the business: marketing United=20
Airlines.  That job, in the midst of United's bankruptcy reorganization,=20
would be an uphill climb for any airline veteran. But it may be an even=20
bigger leap for Tague. Although he's been in the industry for 20 years and=
=20
ran respected discount carrier ATA Airlines, United Airlines is a far=20
different challenge. Tague's recent appointment is the highest-profile hire=
=20
yet by United CEO Glenn Tilton, himself an outsider recruited last year=20
from ChevronTexaco. His position as executive vice president/customer=20
combines an array of functions =97 sales, marketing, advertising,=20
reservations, frequent-flier programs and airline alliances =97 and elevates=
=20
them to a senior level. Within United, the job was even rumored to be the=20
spot from which Tilton's successor would rise.

So the choice of Tague, 40, surprised many because he came from ATA, a=20
midsize carrier best known for its discount fares to and from Chicago,=20
United's hometown. ATA, with 2002 revenue of $1.3 billion vs. United's=20
$14.3 billion, lacks a vast international route network like=20
United's.  Other candidates for the job came from a larger discount airline=
=20
and from other big traditional carriers like United, knowledgeable people=20
said. But either they didn't pass muster or decided against joining United=
=20
now. Tague's mission at the world's second-largest airline is nothing short=
=20
of monumental: help United resuscitate its brand, get out of bankruptcy=20
protection and get ahead of competitors =97 including discounters like ATA.=
=20
"I certainly have a lot to learn," Tague says. "But I've been a student of=
=20
this business a long time. I earned my reputation one brick at a time."

Aviation consultant Mo Garfinkle, who once advised United, says, "The fact=
=20
that United went outside the normal (airline) community demonstrates that=20
it was difficult to find someone to accept this position." Tague, who=20
started the job last week, grew up in an airline family. His father and=20
mother worked for Pan Am in Alaska, she as a flight attendant and he as a=20
ramp worker. His father, Irving, later moved into planning and scheduling=20
and became a founder of Midway Airlines at Chicago's Midway Airport, where=
=20
ATA now has its biggest operation. Tiny Midway is about 30 miles from giant=
=20
O'Hare International, United's home base.

Tague dropped out of college to work in the business. He held executive=20
jobs in his 20s at Midway and later helped lead Air South and Vanguard,=20
small discount airlines that competed against major airlines and failed. At=
=20
ATA, he was executive vice president of marketing and planning before=20
spending five years as CEO.  He guided ATA's rapid growth in recent years=20
from a largely tour and military charter operation to a discount passenger=
=20
airline with a firm foothold in Chicago. ATA's revenue jumped 63% from 1997=
=20
to 2002. It courted budget-minded business travelers with irreverent ads=20
and new service between Chicago and New York, Dallas, Washington, Boston=20
and other cities.  ATA and other airlines at Midway joined with the city of=
=20
Chicago to transform the dreary airport into a bright and busy low-fare=20
hub. Today, more than one of every five domestic flights from Chicago=20
departs from Midway. The ATA Tague left is no fun-loving Southwest,=20
however. With new planes, business-suited flight attendants and assigned=20
seating, it has a distinct business feel. Last summer, ATA introduced=20
in-flight movies and hot sandwiches on long flights at a time when other=20
airlines were cutting back. In July, the airline was named best-performing=
=20
midsize airline by Aviation Week & Space Technology magazine.

But ATA also began posting losses last year. In August, Tague resigned,=20
after founder and majority owner George Mikelsons tried to narrow Tague's=20
responsibilities. ATA declined comment for this story. "I thought Tague was=
=20
a great leader," says Blaylock & Partners airline analyst Ray Neidl. "He=20
had a good game plan getting ATA less dependent on low-margin charter=20
business, building up the hub at Midway, retiring old planes and=20
modernizing the fleet. I was sorry to see him leave." So was ATA's pilots=20
union, a fact that may have played well at United, where the pilots union=20
has a seat on the board. "He knew how to play the labor game, but he always=
=20
maintained the high road," says Kevin Friel, an ATA captain and chairman of=
=20
its pilots union. "His integrity was not something you questioned. I've=20
heard stories of him being on flights and getting up and serving drinks. I=
=20
think he's driven, committed." At United, Tague must reshape a company with=
=20
substantial advantages and difficult problems. It has a worldwide brand=20
name, five U.S. hubs and precious takeoff and landing rights at London's=20
Heathrow and Tokyo's Narita airports. It has a huge following of domestic=20
and international business travelers and a mature workforce of more than=20
70,000 employees.

It's also the biggest airline ever to file for bankruptcy-court protection=
=20
from creditors =97 and amid recession and slumping travel demand, its=20
successful exit from court-supervised reorganization is not assured.=20
Historically a business traveler's airline, United desperately needs to=20
regain those premium fare passengers. But it also feels pressure from=20
encroaching low-fare carriers; United estimates 72% of its passengers are=20
in markets with low-fare competition. One of its top goals is to offer a=20
product that competes with ATA in Chicago, Frontier in Denver, Southwest in=
=20
California, and other discounters. It's from this world that Tague has the=
=20
strongest credentials. "I think United has to be relevant in all segments=20
of the market," he says. "It has to be perceived as a good value." And=20
unlike many critics, he doesn't think United's proposal to create a=20
separately branded, discount airline-within-an-airline is a terrible idea,=
=20
even if those flights operate from United's hub airports. "I think it's=20
possible," he says, to make such a plan work.

One of the biggest questions about Tague is whether he can make the=20
transition to the big league. "He's in a big boat now," says Richard=20
Ziskind, ATA's former sales director. "There are lots of things to fix. But=
=20
John is a very bright guy. He caught on very fast. He's open to thinking=20
out of the box." Tague argues that his experience at smaller companies will=
=20
be useful at a giant bureaucracy like United. To solve problems, "You need=
=20
to distill things to their simplest factor," he says. "Get rid of the noise=
=20
and don't overcomplicate a problem." Tague also looks forward to shaping a=
=20
new image for United: not a company struggling in bankruptcy protection,=20
but a "confident" company, a "winner."  Company officials have frequently=20
stressed its improvement in passenger service. Department of Transportation=
=20
figures show United was the nation's most punctual large airline in 2002,=20
for example. "They are running a fabulous airline out there every day,"=20
Tague says. "A whole lot of people underestimate this company. "



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