United Airlines has told the US bankruptcy court that it has reached tentative cost savings agreements with four of its unions as it struggles to trim USD$2.4 billion a year off its wage bill and meet financial deadlines.
However, in a filing with the court on Friday, the airline sought the right to terminate existing contracts and impose wage cuts on its recalcitrant machinists union. United also wants to introduce new working conditions for its labor force.
Two major groups, the pilots and flight attendants, indicated on the weekend that they would support the company`s call for wage cuts, but the IAM, which represents machinists and mechanics, said it could not accept a proposed 13 percent pay cut for its members. The airline`s dispatchers and meteorologists have also agreed tentative deals. United is hoping that the tentative agreements will be ratified in January.
Pilots are being asked to take a 29 percent drop in pay and the flight attendants will get 9 percent less if they agree to the deal. If the agreements are ratified the cuts will be effective from January 1, 2003.
“The agreements today are a crucial first step in our efforts to change the way we do business at United,” says Glenn Tilton, the carrier`s chairman, president and chief executive officer. “Our goal through this whole process is to create a more competitive airline that develops new business opportunities, responds creatively to the marketplace and provides stable jobs, sustainable growth and durability through economic cycles.
“Today, we begin the process of reaching agreements on the critical work of taking costs out of our system. As we continue to move forward, we will focus on work rules and scope of work changes that will give us the flexibility we need to accomplish our transformation.”
The airline is battling against a February 15 deadline to meet the terms of lenders who have kept the carrier flying through debtor-in possession finance of USD$1.5 billion.