The 9,200 pilots had been scheduled to vote starting
Tuesday on whether to approve a tentative agreement
calling for the wage reduction over three years,
resulting in an estimated dlrs 520 million in savings.
United, which has been unable to gain concessions
from its other unions, cited the pilots' commitment in
its June application for a dlrs 1.8 billion federal loan
guarantee it says is needed to help it recover from
financial struggles. But officials in Washington have
made it clear to the airline that the application will
be rejected without broader, deeper and longer-term cost
savings.
The Air Line Pilots Association opted to postpone the
vote indefinitely while other proposals are reviewed,
union spokesman Herb Hunter said Tuesday.
"It makes no sense to vote on something that's not
going to work," he said.
Under the tentative agreement reached two months ago,
pilots would have permitted United's express carriers to
continue planned growth of regional jet service. The
pilots, who own 28 percent of the company, also would
have received stock options in United parent UAL Corp.
Since the June 22 agreement, UAL's stock has lost
more than 70 percent of its fast-dwindling value,
dropping from dlrs 11.95 to dlrs 3.22 after closing 7
cents lower on Tuesday.
Hunter declined to discuss what other proposals are
under consideration and said it shouldn't be assumed the
pilots union will agree to steeper cuts.
United spokesman Joe Hopkins had no comment on the
vote postponement.
Executives of the nation's No. 2 airline held several
meetings Tuesday with representatives of the carrier's
unions, sharing information about costs, revenues and
projections. Hopkins said he wasn't aware whether they
presented formal cost-savings proposals that chief
executive Jack Creighton said last week would be
forthcoming.
Creighton warned Wednesday that United is preparing
to file for bankruptcy court protection this fall unless
it succeeds in lowering costs dramatically through a
restructuring. He set a 30-day deadline to reach
cost-savings agreements with unions, lessors and
suppliers.
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On the Net:
By DAVE CARPENTER AP Business Writer
Copyright 2002 Associated Press, All rights reserved
United pilots shelve pay cuts vote; airline meets
with unions
CHICAGO, Aug 20, 2002 (AP
WorldStream via COMTEX) -- United Airlines' pilots union
has shelved a vote on a proposed 10 percent pay cut as
the troubled carrier pushes for even bigger cutbacks and
cost savings in a bid to avoid bankruptcy.