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UAL to Cut 1,250 Jobs, Close Centers

Airline, which seeks to avoid bankruptcy, will trim costs in an effort to save $100 million a year.

October 22, 2002|From Times Wire Services

CHICAGO — United Airlines parent UAL Corp., the world's second-biggest airline, said it will lay off 1,250 workers as part of a plan to save $100 million a year and shrink the carrier to fit lower demand.

The company will close reservation centers in San Francisco, Long Beach and Indianapolis in January, resulting in 686 layoffs. It also will close a maintenance line in Indianapolis that services Boeing 757s.

The airline said it will soon announce "additional adjustments" to its schedule and staffing levels.

United is the largest airline operating out of Los Angeles and San Francisco international airports. It has more than 1,900 flights worldwide a day and about 84,000 employees.

Last week, UAL, which is restructuring in an effort to stay out of bankruptcy, announced an $889-million third-quarter loss and said its operations have been losing about $7 million a day.

The announcement came as United prepares to file an updated business plan with the federal government this week, hoping to strengthen its application for further financial assistance by detailing cost cuts and the results of weeks of concession talks with unions and lenders.

United is seeking a $1.8-billion loan guarantee from the Air Transportation Stabilization Board to meet impending debt payments and help it return to profitability.

"These actions are unfortunately necessary given the current weak revenue environment," said Glenn Tilton, the carrier's chairman, president and chief executive. "Like other airlines, we need to make sure that we correctly match supply with demand."

Tilton made clear he is still counting on unions to agree to substantially more cutbacks at the airline, which is 55% owned by its employees.

United and the leaders of its five unions have agreed in principle on the need for $5.8 billion in labor concessions over 5 1/2 years. But implementation of such an agreement hinges on separate deals being reached with each union.

Shares of UAL Corp. closed 22 cents higher Monday at $1.93 on the New York Stock Exchange before the company's announcement.

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Associated Press and Bloomberg News were used in compiling this report.

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