Posted on: Monday, November 18, 2002
United Airlines plans further cuts
Associated Press
CHICAGO — The parent company of United Airlines said yesterday it would cut 9,000 jobs and trim its flight schedule by another 6 percent as part of a restructuring plan tied to its effort to return to profitability.
UAL Corp. faces a Dec. 2 deadline in its fight to avoid a bankruptcy filing. It hopes to receive a $1.8 billion loan guarantee by then.
The carrier has been talking with the Air Transportation Stabilization Board about its loan application and what it needs to do to qualify for the guarantee.
The Elk Grove Village, Ill.-based airline said that with the cutbacks, it should be profitable by 2004.
"Our plan is intended to restore United's financial health, and it gives us the ability to repay ATSB-guaranteed loans," said Glenn Tilton, United's chairman and chief executive officer, in a statement. "The plan aligns our costs and revenues while building a platform for future growth."
United spokesman Jeff Green said the airline's staff would be cut to 74,000 from the current 83,000 by 2004. The additional 6 percent flight reduction would shrink the nation's No. 2 carrier by 23 percent from its size before the Sept. 11, 2001, terror attacks.
Spokeswoman Chris Nardella declined to discuss which jobs were being targeted. Earlier this month, United said it planned to furlough 2,700 flight attendants beginning in January because of a reduced flight schedule. Officials said the layoffs would bring the number of flight attendants on furlough to about 4,800.
United also plans to retire 49 more aircraft, defer all scheduled aircraft deliveries through 2005 and lower capital spending.
More savings will come from an agreement among employees to contribute $5.8 billion in labor cutbacks over 5 1/2 years.
A code-sharing agreement with US Airways is expected to bring in more than $200 million annually, and a revenue-sharing agreement with Star Alliance partner Lufthansa to bring in about $90 million annually.
The airline plans to save also by adding 109 regional jets in conjunction with its United Express partners by April 2004, resulting in a fleet of 236 United Express regional jets, Green said.
