CHICAGO (AFP) - Bankrupt United Airlines is seeking another two billion dollars in labour savings from its workers, according to papers filed with a US district bankruptcy court.
The airline circulated the plan to its unions Thursday, and filed it with the court Friday prior to a November 19 hearing.
The plan calls for the carrier to reduce annual costs by two billion dollars, by slashing wages, eliminating its employee pension plans and changing work rules.
"There can be absolutely no doubt that this industry is facing serious challenges," United chief executive officer Glenn Tilton told employees in a recorded telephone message late Thursday.
"Airfares are at 12-year lows, fuel is at record highs, the industry faces surplus capacity, no pricing power and we approach the slowest travel season of the year."
Tilton said United`s top executives would lead the way by taking a 15 percent pay reduction, effective January 1, and is looking to have the labour cuts in place by mid-January.
He called on labor leaders to cooperate with management to hammer out the cuts "consentually," but the initial response from United`s unions was not encouraging.
The Association of Flight Attendants called the proposal disastrous, and said it would fight the company "over every dime."
"We will fight them at the bargaining table and we will fight them in court," said Greg Davidowitch, AFA`s United Airlines spokesman in a statement.
"AFA will not stand by and let management destroy our careers and our airline."
If voluntary bargaining fails to produce agreements with the unions, UAL would ask the judge handling its bankruptcy case to let it unilaterally reject its labour contracts and impose new terms on its workforce, United spokeswoman Jean Medina said.
The carrier`s unions have already agreed to 2.5 billion dollars in annual givebacks over a six-year period, and their leaders have repeatedly accused Tilton and his team of failing to look at remedies other than labour savings to streamline United`s operations and ease its cash crunch.
The pensions issue has been a particularly prickly one, with United`s unions accusing management of bad faith in its handling of the matter.
The airline in July suspended payments to the four plans, which cover 62,000 employees and retirees. The government says the plans are already underfunded by more than eight billion dollars.
United filed for bankruptcy in December 2002. In the third quarter of 2004, it posted a net loss of 177 million dollars, or 1.55 dollars per share, after one-time items.
11/05/2004 - 23:54 GMT - AFP