United, pilots agree on $1B in concessions

CHICAGO, March 27 (UPI) -- The Airline Pilots Association and United Airlines announced Thursday they had reached a concessions deal that will save the airline more than $1 billion annually.

Union members will now vote on the changes, with ratification possible next month.

The deal comes in advance of a scheduled April 14 hearing in which U.S. Bankruptcy Judge Eugene Wedoff has been asked to nullify all of United's union agreements, which would allow the airline to impose concessions unilaterally.

"This breakthrough agreement is a significant step forward in making the hard changes necessary to reposition United to compete more effectively both immediately and over the long term," United Chief Executive Officer Glenn Tilton said.

"We recognize the sacrifices this agreement represents and admire the pilots for taking these difficult actions."

The deal is the second reached between United and its unions. Meteorologists, represented by the Transport Workers Union, were the first to agree to concessions.

United has until May 1 to reach $15 billion in labor savings to meet goals set by lenders providing debtor-in-possession financing.

Negotiations are continuing with two International Association of Machinists and Aerospace Workers locals, one representing mechanics and the other representing baggage handlers, reservations clerks and ticket agents, as well as the Association of Flight Attendants.

United said the deal will save it $1.1 billion annually.

"The tentative agreement, if ratified by the membership, will help transform United into a more effective competitor against both low cost carriers and other network carriers," ALPA UAL-Master Executive Council Chairman Paul Whiteford said.

"ALPA and the company agree that United's emergence from Chapter 11 as a competitive, viable and financeable entity is in the interest of all of United's stakeholders, creditors, employees and other constituencies - including, of course, the flying public."

The agreement followed by one day a lawsuit filed in federal court in Indianapolis by IAM District 141-M, which represents the mechanics, to keep United from shuttering its Indianapolis maintenance facility and furloughing more than 1,100 mechanics.

United has said the move is necessary as a result of a fall-off in bookings with the start of hostilities in Iraq. A spokesman Thursday said the airline, which filed for bankruptcy protection Dec. 9, is reviewing the injunction request and would have no immediate comment.

"United's action is especially outrageous considering we are in a critical stage of negotiations," District 141-M President Scotty Ford said in a memo to union members posted on its Web site. "United is trying to take advantage of the situation in Iraq to deny our members their contractual rights."

Ford said United's plan to close the maintenance center denied members the required 20-day notice "to exercise their seniority, and moving expenses for employees choosing to relocate to another United Airlines location."

The filing came as United revealed it had lost $367 million in February. United's bankruptcy lenders had ordered the carrier lose no more than $964 million between when it filed Chapter 11 and the end of February to continue bridge financing while the airline reorganizes.

United announced March 20 it planned to close the Indianapolis Maintenance Center, its most modern maintenance facility, by April 15. The first wave of layoffs took place Tuesday, affecting 468 mechanics. The union said the company has decided to mothball planes that had been scheduled to undergo heavy maintenance at the facility.

"The company was not compelled by the conflict in Iraq or its financial crisis to reduce its fleet, as opposed to taking other austerity measures," the mechanics said in their complaint. "The company was not forced to lay off these employees. Rather, it chose to do so."

The union said it doesn't dispute the company's right to lay off employees but insists the union contract must be followed. It also noted the airline has a maintenance contract with an outside vendor.

In Washington, the union representing United's 24,000 flight attendants delivered thousands of letters and postcards to members of Congress asking for legislation to shield airlines and their employees from the financial impact of the war.

The Association of Flight Attendants said another 70,000 airline jobs could be lost because of cuts caused by canceled travel due to the war in Iraq.

UAL creditors also issued an appeal to lawmakers to keep United and other U.S. carriers afloat.