Dive Brief:
- There are “no imminent plans” for United Airlines to move its headquarters from Chicago to Denver, CFO Gerald Laderman said Wednesday in response to questions at the TD Cowen Global Transportation Conference held in Boston.
- “We have a long-term lease at the Willis Tower, our headquarters,” Laderman said, noting that the company has been in Chicago “for decades.”
- Laderman’s comments come about one month after a Reuters report that the Chicago-based airline purchased 113 acres of land in Denver for $33 million, with the stated aim of using part of the land for the expansion of its pilot training facility in the city.
Dive Insight:
United has “outgrown” the space for its Denver training ground, Laderman said, which is nestled beside the now-shuttered Stapleton International airport.
“And so one of the first things we'll do with that new space we have is, we have now a location to be able to expand the flight training center,” Laderman said. “And then over the years, we'll find other opportunities.”
United’s $33 million purchase of land in Denver included two parcels, one of which is near the Denver International Airport. The airline, which broke ground on a new building in its training center in the city last June, is Denver’s largest employer with about 10,000 employees, Reuters reported.
The airline moved its headquarters to Chicago’s landmark Willis Tower in 2012 after occupying space the building since 2007, according to an NBC report at the time. United extended its lease in the tower for 14 years in 2019 despite enticements from other large-scale developers in the city in a well-publicized search for a second headquarters, according to a Chicago Tribune report.
The tower’s largest tenant at the time of the extension, pandemic troubles led United to downsize its Willis Tower presence by three floors as well as to cut jobs in 2020, according to a 2021 report by the Tribune.
A potential move by United to Denver would be another blow to the Chicago commercial real estate market and economy, following the departure of other large corporations in the past few years including the aerospace company Boeing.
The plane maker announced plans last year to move from Chicago to Arlington, Virginia, where it expects to establish a research and technology hub, CNBC reported. Other members of the 2022 exodus from the Chicago area included Caterpillar and Citadel, with the companies citing various reasons from a rise in crime to troubles surrounding inflation, CNN reported.
Laderman’s comments on the Denver plans come as United takes steps to adjust to the recent resurgence in travel after its revenues plunged during the COVID-19 pandemic years when air-traffic slowed to a crawl.
The airline reported total operating revenue of $14.2 billion for the quarter ending June 30, up 17.1% compared to a year prior, as well as carrying its highest volume of revenue passengers since before the pandemic according to the company’s earnings results released July 19.
Still, during the Boston conference Laderman — who has served as the company’s CFO since 2018 and who will be retiring next September, according to company filings — spoke to the difficulty of restoring business both in the airline industry and outside of it to how things used to operate prior to the pandemic.
“I think the entire world underestimated issues like the labor shortages, the supply chain issues,” Laderman said Wednesday. “I don't think we did a wonderful job as an entire world really managing that.”
Just days before United reported its second quarter earnings, the airline reached a tentative deal with the union representing its pilots after four years of negotiations. The deal will raise pilot pay by up to 40% over four years, which the union valued at about $10 billion.
United did not respond to requests for comment.
