- The Washington Times - Tuesday, October 22, 2002

CHICAGO (AP) United Airlines is cutting 1,250 more jobs, or 1.5 percent of its work force, and closing three reservation centers as part of efforts aimed at saving the troubled carrier about $100 million annually.
More cutbacks at United are expected later this week as the carrier joins other airlines responding to declining air traffic.
Yesterday's 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 Elk Grove Village, Ill., 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 talks with unions and lenders.
The nation's second-largest airline, which has lost $4 billion since mid-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 new 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."
Mr. Tilton made clear he is still counting on unions to agree to more cutbacks at the airline, which is 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 years. But implementation of such an agreement hinges on deals being reached with each union, and the International Association of Machinists is balking at some terms of the latest proposed concessions.
"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 were continuing yesterday, union spokesman Joe Tiberi said.
The latest layoffs, which come on top of 20,000 made after the terrorist attacks of September 11, 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 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.
It also 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 will remain.


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