United Airlines’ Union Leaders Back Interim Wage Cuts
Officials representing United Airlines pilots and flight attendants said Saturday they would recommend approving temporary pay cuts to help the troubled carrier slash costs.
Leaders of the Air Line Pilots Assn. met Saturday and approved a temporary 29% wage cut effective Jan. 1, ALPA spokesman Dave Kelly said.
The Assn. of Flight Attendants will recommend that its members ratify a 9% interim wage cut also effective Jan. 1, association spokeswoman Sara Dela Cruz said.
The unions are scrambling to preserve their contracts following United’s motion filed Friday in U.S. Bankruptcy Court to scrap its labor contracts if it fails to reach voluntary wage concessions.
The unions have until Jan. 8 to approve the voluntary wage cuts.
“Once again, our pilots have taken extraordinary steps today of significant wage concessions -- taking more than our fair share of the pain -- as part of their commitment to helping the company and securing its future,” said Paul Whiteford, chairman of United’s ALPA unit, which represents the carrier’s 9,000 pilots.
Whiteford said he expected a difficult period of negotiations as United works with its unions on a long-term recovery plan.
United, an Elk Grove Village, Ill.-based unit of UAL Corp., said Friday it had reached tentative agreements with unions representing its pilots, flight attendants, dispatchers and metrologists.
The No. 2 U.S. airline said it would ask a judge to enforce pay cuts on the International Assn. of Machinists, which has yet to agree to cuts.
The airline is seeking a 13% pay cut from machinists, about twice the amount it had sought before filing for Chapter 11 on Dec. 9, the largest bankruptcy in aviation history.
United needs wage cuts from employees to meet the terms of its $1.5-billion loan agreement to help the airline emerge from bankruptcy.
Four large institutions have provided the carrier with an initial $800 million to help it operate while in bankruptcy. But it must meet specific cash flow targets by Feb. 15 to receive an additional $700 million in financing.
“This is a temporary agreement to give United the financial relief it needs to meet its [loan] covenants and at the same time allows us to better preserve our jobs and quality of life,” Dela Cruz said. “It’s the best of two bad choices.”
