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Sunday, 1 December, 2002, 10:00 GMT
United flight crew accept pay cut
United Airlines planes in Chicago
United Airline's future is still in jeopardy
Flight attendants at United Airlines have voted to accept a pay cut as the US airline battles to avoid bankruptcy.

About 87% of United's flight stewards and stewardesses voted in favour of a new contract, which will see pay cuts totalling $412m (�259m) spread over five and a half years.

"The flight attendants have made the difficult but necessary decision to contribute our part in the financial restructuring of United," said Greg Davidowitch, a representative of the Association of Flight Attendants.

But United's future remains in jeopardy after mechanics at the airline rejected a new pay deal last week.

Bleak outlook

United is trying to cut wage costs by 15% in an attempt to remain solvent.

Unless it can persuade its workforce to agree to pay cuts, the airline will not be granted a $1.8bn federal loan guarantee that would enable it to keep afloat.

United recently negotiated deals for wage cuts worth $5.2bn from union leaders, but the new deals are dependent on all sets of workers accepting the new conditions.

Last week's rejection of the deal by mechanics increased the airline's chances of filing for bankruptcy, analysts said.

On Friday, shares in United's parent company UAL tumbled by 31% to $2.51, as investors worried about its future prospects.

The credit rating agency Standard & Poor's also downgraded the company's long-term debt.

"The mechanics' vote makes bankruptcy virtually inevitable for United and UAL," wrote S&P analyst Philip Baggaley.

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The BBC's Richard Forrest
"United is said to be losing $7 million a day"
See also:

18 Nov 02 | Business
04 Nov 02 | Business
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