United trims 1,250 jobs, closes centers

By Dave Carpenter
Associated Press

Employees leave United Airlines' Indianapolis Maintenance Center facility in Indiana. The nation's No. 2 carrier said it would close one of its three Boeing 757 maintenance lines at the center. The airline also will close reservations offices in Indianapolis, San Francisco and Long Beach, Calif. Associated Press

More cutbacks are expected later this week by United as it joins other airlines in trimming back this fall to try to fight declining air traffic and mounting losses.

The announcement came three days after United, which is restructuring in an effort to stay out of bankruptcy, announced an $889 million third-quarter loss and said its operations have been losing about $7 million a day.

The airline said it will close its reservations offices in Indianapolis, San Francisco, and Long Beach, Calif., on Jan. 4, resulting in the layoffs of 686 employees. Nine reservations centers — including the carrier's center in Honolulu — will remain open.

The Elk Grove Village, Ill.-based airline also said it will close a maintenance line and convert five cities to United Express service.

The moves came as United prepares to file an updated business plan with the federal government this week, hoping to strengthen its application for further financial assistance by detailing cost cuts and showing progress from weeks of concession talks with unions and lenders.

The nation's No. 2 airline, which has lost $4 billion since the middle of 2000, is seeking a $1.8 billion loan guarantee from the Air Transportation Stabilization Board to meet impending debt payments and help it return to profitability.

"United is facing its toughest challenge ever," said Glenn Tilton, the carrier's chairman, president and chief executive. "These actions are unfortunately necessary given the current weak revenue environment. Like other airlines, we need to make sure that we correctly match supply with demand."

Tilton made clear he is counting on unions to agree to substantially more cutbacks at the airline, 55 percent owned by its employees.

"These painful cuts will lower some of our costs, but they will not provide the labor-cost savings we need for our recovery plan to succeed," he said.

United and the leaders of its five unions have agreed in principle on a target of $5.8 billion in labor concessions over 5 1/2 years. But implementation of such an agreement hinges on separate deals being reached with each union, and the International Association of Machinists is balking at some terms of the latest proposed concessions in direct talks with the company.

"If these terms are not resolved, acceptance of the United Airlines recovery plan may not be ratified," Scotty Ford, president of IAM District 141-M, and other union officials said Sunday.

Talks between the machinists and the company about the recovery plan and the layoffs were continuing late yesterday afternoon, IAM spokesman Joe Tiberi said. He had no details.

The latest layoffs, which come on top of 20,000 made after the terrorist attacks in September 2001, largely affect mechanics and reservations workers — both represented by the machinists union.

United said that as of Jan. 7 it will convert to United Express service in Eugene and Medford, Ore.; Cedar Rapids, Iowa; and White Plains and Syracuse, N.Y. It said United Express carriers SkyWest, Air Wisconsin and Atlantic Coast Airlines can more efficiently serve those cities.

The switch will result in 150 layoffs.

United said it also will close down one of its three Boeing 757 maintenance lines at its Indianapolis maintenance center, resulting in the layoffs of 250 mechanics as well as an additional 160 line maintenance positions related to schedule reductions.

The airline said it will announce additional adjustments to its schedule and staffing levels soon — expected to be later this week, according to spokesman Joe Hopkins. He said he did not know what day the changes to the loan guarantee application would be filed.

United currently operates more than 1,900 flights daily. As of Oct. 7, it had just under 84,000 employees, including 8,767 pilots, 22,294 flight attendants and about 37,000 machinists' union members — encompassing mechanics, ramp, and reservations and customer service employees.