UAL on Deathwatch
Join Date: Jun 2001
Location: Rockytop, Tennessee, USA
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Liquidation looms, ALPA hopes to keep things afloat and beg for another government bailout. Worth a try perhaps...
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United, pilots reach deal
Pilots say union leadership supports package of pay cuts to try to help bankrupt No. 2 airline.
March 27, 2003: 5:16 PM EST
NEW YORK (CNN/Money) - United Airlines reached a tentative agreement Thursday on a cost-cutting contract with leaders of the Air Line Pilots Association, and said the deal would save the bankrupt airline approximately $1.1 billion a year.
United had said it needed total labor savings of about $2.6 billion to meet lenders' requirements to continue funding it through its bankruptcy reorganization.
"This is a huge step in enabling this airline to emerge from Chapter 11 as a stronger, more competitive company," said Glenn Tilton, CEO of United. "We are committed to continuing to work collaboratively with our remaining unions on similar agreements," he added.
Meanwhile, United's flight attendants, represented by the Association of Flight Attendants, said they are still continuing negotiations with the airline. The AFA said that reaching consensual agreements between labor and management is the best solution for United's successful restructuring.
The world's No. 2 airline filed for bankruptcy protection December. In Chapter 11, a company is protected from creditors while it tries to reorganize. It also can ask courts to void labor contracts and impose new deals. The bankruptcy court has scheduled hearings for the week of April 14 on whether to void the labor agreements, putting pressure on the unions to reach new deals.
United has proposed starting a separate low-cost, lower-pay airline with about 30 percent of its assets and a separate work force made up of furloughed United employees. The proposal drew initial opposition from United unions. Management argues such a carrier is needed to compete with low-fare carriers such as Southwest Airlines (LUV: Research, Estimates) and JetBlue Airways (JBLU: Research, Estimates), which have continued to make money while all the larger "network" carriers such as United have lost money.
The pilots' statement Thursday suggested the union had agreed to management's proposal, although it did not explicitly spell out how the contract would work with the plan.
"The tentative agreement...will help transform United into a more effective competitor against both low-cost carriers and other network carriers," the union statement said. "ALPA and United will continue to work together to ensure that United's operations remain competitive in every market United serves, including markets served by the company's no-frills, low-fare competition."
ALPA is the first of three major unions at the carrier to agree to a deal in current talks. The union representing 16 meteorologists also has agreed to a labor pact that still needs approval of its rank and file membership.
ALPA is the second-largest union at United in terms of membership, behind the International Association of Machinists, which represents mechanics and other ground employees. But due to higher salaries for flight crews, ALPA's membership accounts for the greatest share of labor costs at United, making its cost savings crucial to the airline's plan.
But the pilots also have been more willing to agree to concessions due to their dependance on the seniority system for pay and work conditions, which makes the pilots most vulnerable in case of a liquidation. It was the first union to agree to cost savings in past discussions with the airlines.
The IAM has been the most reluctant to agree to cuts, and on the eve of the airline's bankruptcy filing its mechanics voted against a concession contract endorsed by their leadership. So even with the pilots' deal in place, United has a long way to go to reach the necessary labor deals.
________________________________________
United, pilots reach deal
Pilots say union leadership supports package of pay cuts to try to help bankrupt No. 2 airline.
March 27, 2003: 5:16 PM EST
NEW YORK (CNN/Money) - United Airlines reached a tentative agreement Thursday on a cost-cutting contract with leaders of the Air Line Pilots Association, and said the deal would save the bankrupt airline approximately $1.1 billion a year.
United had said it needed total labor savings of about $2.6 billion to meet lenders' requirements to continue funding it through its bankruptcy reorganization.
"This is a huge step in enabling this airline to emerge from Chapter 11 as a stronger, more competitive company," said Glenn Tilton, CEO of United. "We are committed to continuing to work collaboratively with our remaining unions on similar agreements," he added.
Meanwhile, United's flight attendants, represented by the Association of Flight Attendants, said they are still continuing negotiations with the airline. The AFA said that reaching consensual agreements between labor and management is the best solution for United's successful restructuring.
The world's No. 2 airline filed for bankruptcy protection December. In Chapter 11, a company is protected from creditors while it tries to reorganize. It also can ask courts to void labor contracts and impose new deals. The bankruptcy court has scheduled hearings for the week of April 14 on whether to void the labor agreements, putting pressure on the unions to reach new deals.
United has proposed starting a separate low-cost, lower-pay airline with about 30 percent of its assets and a separate work force made up of furloughed United employees. The proposal drew initial opposition from United unions. Management argues such a carrier is needed to compete with low-fare carriers such as Southwest Airlines (LUV: Research, Estimates) and JetBlue Airways (JBLU: Research, Estimates), which have continued to make money while all the larger "network" carriers such as United have lost money.
The pilots' statement Thursday suggested the union had agreed to management's proposal, although it did not explicitly spell out how the contract would work with the plan.
"The tentative agreement...will help transform United into a more effective competitor against both low-cost carriers and other network carriers," the union statement said. "ALPA and United will continue to work together to ensure that United's operations remain competitive in every market United serves, including markets served by the company's no-frills, low-fare competition."
ALPA is the first of three major unions at the carrier to agree to a deal in current talks. The union representing 16 meteorologists also has agreed to a labor pact that still needs approval of its rank and file membership.
ALPA is the second-largest union at United in terms of membership, behind the International Association of Machinists, which represents mechanics and other ground employees. But due to higher salaries for flight crews, ALPA's membership accounts for the greatest share of labor costs at United, making its cost savings crucial to the airline's plan.
But the pilots also have been more willing to agree to concessions due to their dependance on the seniority system for pay and work conditions, which makes the pilots most vulnerable in case of a liquidation. It was the first union to agree to cost savings in past discussions with the airlines.
The IAM has been the most reluctant to agree to cuts, and on the eve of the airline's bankruptcy filing its mechanics voted against a concession contract endorsed by their leadership. So even with the pilots' deal in place, United has a long way to go to reach the necessary labor deals.
Last edited by Airbubba; 28th Mar 2003 at 08:12.
Join Date: Jun 2001
Location: Rockytop, Tennessee, USA
Posts: 5,898
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Looks like the UAL TA has a 30% cut in pre-bankruptcy book rates with a lot of work rule concessions.
B744 and 777 rates will be old 777 rates minus 30%.
It would be a six year contract with yearly 1.5% increases in 2006-2009.
Medical, vacation, retirement all reduced and based on lower rates.
TA includes provisions for "me too" and "fairness" adjustments (no, I'm not joking).
B744 and 777 rates will be old 777 rates minus 30%.
It would be a six year contract with yearly 1.5% increases in 2006-2009.
Medical, vacation, retirement all reduced and based on lower rates.
TA includes provisions for "me too" and "fairness" adjustments (no, I'm not joking).
