This is a partial transcript of The Big Story With John Gibson, Dec. 9, 2002, that has been edited for clarity. Click here to order the complete transcript.

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JOHN GIBSON, HOST: United Airlines is the largest bankruptcy filing in aviation history. So if this can happen to the world's no. 2 airline, what does it mean for all the companies that are much lower down the list?

Joining us now is Gary Chase, an airline analyst for Lehman Brothers.

First of all, for people who've got United tickets or plan to go someplace at Christmas on United, is this any big deal?

GARY CHASE, LEHMAN BROTHERS: I think most travelers should expect that United is going to meet whatever obligations it had in terms of schedule, frequent flyer miles, et cetera. I think most travelers ought to find that Chapter 11, certainly in the early stages, is going to be pretty transparent. It's going to be hard to tell the difference between United tomorrow and what it was, say, last week.

GIBSON: So what about the other airlines? If this can happen to United, it potentially could happen to American, Southwest, Northwest, Continental, any of those other major carriers?

CHASE: I think it certainly highlights what is a clear need on the industry's part to restructure and get its costs much more in line with the new realities of the revenue environment.

GIBSON: That means paying people less?

CHASE: Well, that means paying people less, being more productive, generally doing more with less. That means sacrifice on the part of vendors, suppliers, lessors, labor, et cetera.

GIBSON: United is, at least theoretically, employee owned. Does that play any part in what has happened here?

CHASE: I don't think so. A lot of people have blamed the employee ownership model. I think as a model, the jury's still out as to whether or not that works. I can say that there were certain aspects of that that I think were executed poorly over time, specifically, the company really failed to instill a culture of… a sense of ownership on the part of employees in the profitability picture for the entire airline.

GIBSON: Well, what happened? I mean, if you live in the western part of this country, you can hardly go anywhere without flying United. United is a huge airline. What happened? How could this happen to them?

CHASE: We're dealing with an industry that has a tremendous portion of its costs fixed. They're very hard to maneuver in the near term. Post-Sept. 11, we had a dramatic reduction in the overall demand for air travel. We actually estimate that in the immediate aftermath of Sept. 11, demand was off some 30 percent from where it was just in the days immediately leading up to Sept.11, which we all know wasn't such a great environment for the economy in general, certainly the airlines.

We've seen some recovery, but we're still down on the order of 15, 18 percent. In a business that has such a large portion of its costs that are fixed, that's really the largest driver of what is going on.

GIBSON: United wants a government loan guarantee, essentially a bailout, and they evidently believe that filing for Chapter 11 will help them get that. Are they right about that?

CHASE: Again, United, like most of the industry, has a clear need to restructure. I think Chapter 11 is really the only option for them right now to get their costs more in line. It will provide some relief from creditors and lessors and give the company some time to reorganize and think about exactly what aspects of its business model are viable for the long term.

So yes, I do think Chapter 11 will help them achieve what the government found wanting in their initial application.

GIBSON: Gary Chase, airline analyst for Lehman Brothers. Gary, thanks very much.

CHASE: Thank you.

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