UAL Corporation (NYSE: UAL) today announced details of its tentative and ratified labor agreements with the companyå‘s union employees. The company also announced the details of its financial recovery arrangement with non-union employees. Taken together, the recovery program is estimated to provide United with approximately $5.8 billion in labor cost savings before capacity reductions. After taking into account recently announced capacity reductions, the companyå‘s labor cost savings from the financial recovery program are projected to be approximately $5.2 billion, which is in line with the framework agreed upon by the company and its unions.
Additionally, United estimates that the capacity reductions - made possible by its agreement with the Air Line Pilots Association - will result in an additional $1.2 billion in profit improvements over the recovery program period. When added to the previously announced $1.4 billion in annual non-labor cost savings and revenue enhancements included in the program ($7.7 billion over the recovery program period), United’s total post-capacity reduction labor savings and profit improvements will equal $14.1 billion over the next five-and-one-half years.
As part of the new agreements, United’s union employees would receive stock options and participate in a new profit sharing plan. The agreements also include immediate wage-rate reductions as well as a number of other detailed provisions for each group. Below are further details of each agreement, broken down by employee group.
For full details see www.ual.com