CHICAGO - Jan. 10, 2003 - UAL Corp. (NYSE: UAL), the parent company of United Airlines, today received a ruling from the bankruptcy court that will allow the company to implement interim wage reductions of approximately $70 million a month beginning January 2003 for all of its union groups. Todayå‘s ruling will keep the company on track to meet debtor-in-possession financing covenants and will provide more time for collaborative discussions between the company and its unions regarding the long-term transformation necessary to emerge successfully from Chapter 11.
As previously announced, United’s pilots, flight attendants, dispatchers and meteorologists ratified wage reduction proposals earlier this week that will now go into effect. The court’s order imposes wage reductions on the company’s employees represented by the International Association of Machinists, which did not agree to the wage reduction proposals. The wage reductions will remain in effect until the earlier of a final agreement on modifications to the collective bargaining agreements or May 1, 2003, subject to further proceedings before Judge Wedoff.
“Now that we have received court approval to take the immediate steps necessary to stabilize our cost structure, we can devote our attention to working with our unions on the longer-term imperatives currently facing the company. From the outset of this process, it has been United’s objective to make the necessary changes in a collaborative way. We thank our unions and employees for making the immediate sacrifices necessary for us to be able to continue discussions on the long-term changes needed to re-shape United into a strong and vibrant competitor,” said Glenn F. Tilton, chairman, president and chief executive officer.
The wages of United’s management and salaried employees were reduced effective Dec. 16, 2002, and additional cost-saving measures will be implemented later this month. Court approval is not required for reductions affecting these employees.