United Airlines Faces Possible Strikes
The last thing United Airlines wants -- a strike -- is looming over the carrier as it tries to emerge from 2 1/2 years in bankruptcy protection.
Two unions -- representing United's 6,800 mechanics and 19,500 other ground workers -- are threatening to strike if the airline persuades a U.S. Bankruptcy Court judge to annul their contracts and impose another round of wage and benefit cuts.
United plans to seek the court's help if it can't negotiate long-term concessions with the workers on its own. They're still bargaining, but a hearing on United's request is scheduled to start May 11 in Chicago.
The hearing also would decide the outcome of United's efforts to jettison most of its employees' underfunded pension plans, which the airline says it can no longer afford. That move also is being contested by the unions.
United, a unit of UAL Corp., is scheduled to file an update on its efforts with the court today. Among other things, the filing is expected to note that United did reach new cost-saving deals with its pilots and flight attendants in January, but it still needs long-term concessions from the mechanics and ground workers.
Even some of the progress made so far is in jeopardy. On Friday, the flight attendants, who agreed to an additional $131 million of concessions, threatened to terminate the new deal in 20 days unless the airline provides details on givebacks made by salaried employees -- which a United spokeswoman described as "a deliberately disingenuous effort" by the flight attendants "to undermine the cost-savings progress made to date."
Based in suburban Chicago, United carried 71 million passengers last year and is the nation's second-largest carrier, behind AMR Corp.'s American Airlines. United also is the busiest airline at the Los Angeles and San Francisco international airports, which are key links to its important transcontinental and U.S.-Asia service. About 4,000 of its 61,000 employees live in California.
United filed for Chapter 11 bankruptcy reorganization in December 2002, after suffering billions of dollars in losses. Like most carriers, United was hit by the plunge in air travel after the Sept. 11, 2001, terrorist attacks.
But even before the attacks, United was plagued by years of management-labor problems, a relatively high cost structure, checkered customer service and costly management missteps.
