United Airlines CEO: U.S. Airlines Over-Regulated

United Airlines CEO Glenn Tilton reiterated his call Thursday for the elimination of government regulations that he said are holding U.S. airlines back from competing with emerging international "super-carriers."

Tilton told an aviation conference that limits on open access to foreign markets and cross-border investment opportunities need to be dropped. The over-regulation, he said, is the reason no U.S. airline is among the top 20 that fly internationally as measured by operating profitability.

He singled out the Department of Transportation's 11-year-old international aviation policy as not reflecting changed market realities, citing it as preventing the development of carrier combinations across national borders such as KLM and Air France in Europe.

"The restructuring of the network carriers has strengthened our ability to compete," said the chief executive of United and parent UAL Corp., which exited bankruptcy protection in February after 38 months of restructuring. "As we move to the future, we should be able to compete more effectively in the global market, not limited by regulatory 'protections' from international competition or international investment."

Airlines, Tilton said, should be allowed to function "the same way as other global businesses - driven by the dictates of a free market, not government edicts."

Asked if United would pursue a combination with Star Alliance partner Lufthansa if such restrictions were dropped, he did not answer directly but said airlines should be able to pursue whatever opportunities they can that make sense.

"We ought to be able to create in this country powerful combinations of companies that still are able to compete effectively in the U.S. and the consumer has no less choice," he said.

Tilton said he was delighted that United had secured a deal, backed by state and city incentives, to move its headquarters to downtown Chicago from suburban Elk Grove Village, Illinois, effectively staying in its self-described "hometown."

United announced Saturday that it will move about 350 corporate employees into a new corporate headquarters in early 2007 in the former R.R. Donnelley & Sons Co. building overlooking the Chicago River. It will consolidate several suburban facilities in its campus at Elk Grove Village near Chicago's O'Hare International Airport.

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