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Last Updated: Monday, 31 January, 2005, 22:20 GMT
Unions agree United wage cut deal
United Airlines jet
United still has to strike deals with two major unions
Pilots and flight attendants at United Airlines have agreed to accept pay cuts worth $310m a year to help the carrier emerge from bankruptcy protection.

Unions representing staff at America's second largest carrier approved the proposals which are part of United's $725m annual cost saving target.

The airline is seeking a court order to impose a temporary pay cut on mechanics who rejected a similar offer on Friday.

United has been in bankruptcy protection since December 2002.

Two deals

Pilots agreed on Monday to a 11.8% wage cut, which will save the struggling airline $180m a year.

In a separate development, flight attendants approved a 9.5% reduction in pay, which will yield $131m in annual savings.

We are pleased that we have agreements that provide a critical portion of the long-term savings we need
Jean Medina, United Airlines

The agreements must be ratified by a federal bankruptcy judge, whose decision was expected later on Monday.

United has now reached agreements with four of six unions over new employment contracts as it seeks to find annual savings of up to $725m.

"We are pleased that we have agreements with both unions that provide a critical portion of the long-term savings that we need to successfully complete our restructuring," said United spokeswoman Jean Medina.

Savings plea

Unions have already approved some $2.5bn in wage concessions in an effort to put the airline back on a sound financial footing.

"We call on the company to use the savings obtained in this agreement wisely," said Mark Bathurst, chairman of the executive council of the Air Line Pilots Association.

Unions representing United mechanics and baggage handlers are still holding out, however.

Mechanics' unions have threatened strike action if the airline succeeds in persuading a court to overturn existing employment contracts.

United is seeking a temporary 10% pay cut over the next four months while the two sides try to reach a long-term agreement.

The airline has given baggage handlers until April 11 to reach a deal.

United is just one of a number of US airlines in financial trouble as a result of soaring fuel costs, weak demand and low-cost competition.


SEE ALSO:
United pilots' pensions protected
30 Dec 04 |  Business
United Airlines imposes wage cuts
14 Dec 04 |  Business
'Fiscal timebomb' for US airlines
15 Oct 04 |  Business


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