Strike Talk Grows at United Airlines

Travelers are growing increasingly nervous that United Airlines could be hit with a strike just as the busy summer travel season nears, although some analysts said they didn’t expect a walkout because it could sink the carrier.

“It’s a scare because it is such a big airline, especially here in California,” said Howard Berk, an agent at Montrose Travel in Montrose. Berk said at least nine customers called with concerns Wednesday, one about a vacation in August that includes air travel on United.

Passengers have stopped short of rebooking their flights on other carriers, agents said. But concern about the fate of the nation’s second-biggest airline mounted Wednesday as a third United employee group -- 19,500 ramp workers and other ground employees -- voted to authorize their leadership to call a strike if they couldn’t reach a new contract.

United’s 15,500 flight attendants and 6,800 mechanics already have vowed to strike if they can’t come to terms with the airline.

United, which Wednesday reported a $250-million loss from operations in the first quarter, says it needs to wring more concessions from its workers to emerge from 2 1/2 years in Chapter 11 bankruptcy protection.

Having failed to reach agreements so far with its ground workers and mechanics, United is asking U.S. Bankruptcy Judge Eugene Wedoff in Chicago to impose the cuts on its behalf.

A hearing on United’s request began Wednesday and is expected to run into next week. If Wedoff sides with the airline, the ground workers and mechanics vow to walk out.

“Our members know the risk of a strike, but if United fails to respond to our members’ needs, it is a step they are prepared to take,” said Randy Canale, head of the United chapter of the International Assn. of Machinists, which represents the ground workers.

Only a day earlier, Wedoff approved United’s proposal to shift the workers’ underfunded pension plans to the nation’s pension insurer, the Pension Benefit Guaranty Corp. The agency will assume $6.6 billion in net liabilities, the largest corporate pension default in its 31-year history.

The move will mean lower retirement benefits for many United employees, and United’s flight attendants, who had reached a contract with the airline in January, are nonetheless threatening to strike as well because of the pension hand-over.

United is still negotiating with its workers in hope of reaching settlements that would avert any work stoppage. The airline’s 6,400 pilots have reached wage and pension settlements with United and are not threatening to walk out.

“We think our employees understand that any disruption to our operations really does nothing but punish our employees and our customers,” United spokeswoman Jean Medina said.

Some analysts said they didn’t expect a walkout because United probably would get a court injunction ordering the employees back to work on the grounds that their strike was illegal.

“It may be a feel-good strategy, but it is not a good long-term proposition for the employees,” said Jon Ash, president of InterVistas-GA2, an airline consulting firm in Washington.

Others doubted that workers would risk irreparably damaging the airline.

Because United is in bankruptcy, “a full-scale strike by any major union would be financially devastating and could lead to liquidation,” analyst Philip Baggaley of Standard & Poor’s said in a note to clients Wednesday.

“For that reason, it appears that the unions will instead seek to use that threat, but not follow through, in an effort to win better terms,” he wrote.

But Ash cautioned that some employees might engage in a work slowdown, in which they would operate “by the book” and avoid overtime shifts without violating their contracts or any law.

United’s pilots and mechanics used that tactic in the summer of 2000. The slowdown contributed to the delay or cancellation of thousands of flights, disrupted the entire U.S. travel system and alienated many of United’s passengers.

American Airlines’ pilots also engaged in an 11-day sickout in early 1999 that disrupted travel for more than half a million people. But the pilots’ union later was fined $45.5 million by a federal judge for defying his back-to-work order, a precedent that probably hasn’t been forgotten by United’s unions, Ash said.

Two years earlier, American’s pilots had just gone on strike when President Clinton invoked a rare emergency measure and ordered the pilots to keep flying.

United, based in a suburb of Chicago, carried 71 million passengers last year. It serves 200 cities in 26 countries and employs about 60,000 people, including 15,200 in California.

It’s the busiest airline at the Los Angeles and San Francisco airports. United also has hubs in Chicago, Denver and Washington.

But United has lost nearly $10 billion since the September 2001 terrorist attacks. To survive, the carrier not only has moved to shed its pension obligations, but also has been trying to get more than $3 billion a year in wage-and-benefit concessions from its workers.

For this year’s first quarter, United’s parent company, UAL Corp., reported a net loss of $1.1 billion, compared with a net loss of $459 million a year earlier. About $768 million of the loss was due to reorganization charges. Revenue was flat at $3.9 billion.

At Los Angeles International Airport, where officials said United’s flights were operating according to schedule Wednesday, some travelers said that the airline’s problems had taken a toll on its service and that the strike threats only added to their concern.

“The service is already so bad,” UCLA student Ann Matooka said as she waited for a United flight. Another traveler, Jennifer Cole of Los Angeles, agreed and said, “I don’t think I’ll be flying United anymore.”

United Chief Executive Glenn Tilton, in a telephone message to employees Wednesday, said, “Our operations and the quality of service are better than ever.”

He noted, for example, that government statistics ranked United among the top airlines in on-time performance. United’s load factor -- that is, the percentage of its seats filled with passengers -- is near a record high for the carrier.

Another LAX passenger, Nancy Hempstead, said she still supported United. “I hope they make it out of this,” she said. “I just hate those discount airlines, where they herd you around like cattle.”

Corporate clients are also nervous, calling their travel agents for advice on whether they should switch their United reservations to other airlines, agents said. But that can be an expensive option if the tickets are nonrefundable.

In the meantime, United customer service agent Carla Skukan said, she “will try to stick it out” as United maneuvers to survive. Her hourly wage already has dropped to $19 an hour from $24, but “it’s happening to all of the airlines,” she said while taking a break at LAX.

She added: “The only bad thing is, how are people, customers, going to respond to us?”

Times staff writer Jennifer Oldham contributed to this report.