- The Washington Times - Thursday, January 30, 2003

CHICAGO, Jan. 30 (UPI) — Unions representing pilots and flight attendants at bankrupt United Airlines say they will fight any proposal to create a low-cost airline using United's planes, routes and employees.

Pilots said United wants to set up a two-tier system and pay non-United employees less in a breakup the 77-year-old carrier. Delta Airlines this week announced plans to create Song, a discount carrier flying Boeing 757 jetliners between the Northeast, Washington and Florida. United President and Chief Executive Officer Glenn Tilton has unveiled a similar plan for a low-fare carrier to his board of directors.

"The task before us is to transform United into a successful and aggressive competitor for the long term for all customers and across all markets," United said in a statement Wednesday. "We believe a low-cost carrier, fully integrated into a global hub and spoke network for the first time, will be a critical and dynamic element in United's future strength."

Paul Whiteford, chairman of the Air Line Pilots Association chapter at United, called the idea a non-starter and said creating a discount carrier would "lead to the death of United Airlines."

"Inexplicably in the seven weeks since United filed for Chapter 11 bankruptcy protection, senior management has locked the pilots out of the process and refused to engage in any meaningful negotiations over our future," Whiteford said. "Instead, they appear to be proposing a plan to break up United Airlines by giving United routes, aircraft and other assets to another company — with a whole set of new managers and employees."

United, the world's second-largest airline, reportedly would shift up to 40 percent of its employees and flights to the new low-fare operation and take on Southwest Airlines and JetBlue, two success stories in the troubled airline industry.

United filed for Chapter 11 bankruptcy protection on Dec. 9 and has lost more than $4 billion since mid-2000. Pilots accepted a 29 percent pay cut on Jan. 7 and flight attendants gave back 9 percent of their wages as part of concessions to allow United to qualify for $1.5 billion in reorganization financing from lenders.

Management began outlining details of its reorganization plan to creditors and the unions earlier this week.




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