United aims for another $500 million in cuts
Saturday, September 18, 2004
CHICAGO -- Struggling to put together a new bankruptcy plan, United Airlines said Friday it is in talks with its unions about the need for an additional $500 million in cost cuts. The cuts would come on top of $655 million in yearly cost savings the company identified two weeks ago and $2.5 billion in wage and benefit cuts it made a year ago. They also would be separate from a tentative plan to end employee pension plans, which would save $4.1 billion in payments due over the next five years.
Chief Financial Officer Jake Brace indicated Friday that those moves still are not enough in the face of sharp increases in jet fuel costs and competition from discount carriers -- problems also plaguing other major airlines.
But the pilots' union signaled its growing impatience after 21 months in bankruptcy.
"The United pilots are growing increasingly concerned that the company's current management team may not be able to craft a bankruptcy exit that preserves a strong, profitable enterprise," the United chapter of the Air Line Pilots Association said in a statement.
Sara Nelson Dela Cruz, spokeswoman for the United unit of the Association of Flight Attendants, said the union had no comment about the extra cuts but reiterated its lack of faith in management.
"This management just keeps coming after the employees without attempting to exhaust other cost savings and without creating a business plan that will allow us to exit from bankruptcy," she said.
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