Nov 25, 2004 3 min read

By Don Babwin Associated Press Writer

CHICAGO (AP) – United Airlines has given its pilots’ union a series of suggestions for making more than $191 million in wage and benefit cuts the carrier says it needs to pull out of bankruptcy – from a straight 18 percent pay cut to smaller cuts and changes in work rules.

The proposal is contained in an analysis by the Air Line Pilots Association negotiating committee that The Associated Press obtained Wednesday. United made the suggestions last week.

Pilots’ spokesman Dave Kelly called the proposal “an opener” in negotiations with United, which this month said it needed an additional $725 million from its unions on top of the $2.5 billion United employees have already made in annual labor concessions.

“Nothing is set. There’s nothing definite,” said Kelly, who would not comment on details of United’s suggestions or the ALPA committee’s analysis of the proposal.

United spokeswoman Jean Medina agreed the proposal is just a start. “We’re very open to sitting down and discussing what options the unions might like to put forth to meet those same savings,” Medina said.

According to the union negotiating committee’s analysis, United is also proposing that it be allowed to cut pilots’ wages another 4 percent if necessary for a period of six months after the airline emerges from bankruptcy.

The analysis, distributed to all the airline’s 6,400 pilots, indicates that if they accept “all the work rule and benefit erosions” proposed by the airline, their pay would be cut 8 percent. Or, the analysis continued, the union “may remove some of the work rule concessions with the additional pay cuts up to approximately 18 percent.”

Among the proposed work rule changes is increasing the time pilots of the biggest jets fly from 85 hours a month to 95 hours a month, eliminating the premium pilots are paid for flying late at night and reducing sick leave pay.

United’s proposal, called a term sheet, arrived the same week a federal bankruptcy judge gave the airline more time to negotiate with its unions on labor concessions.

Last week, Judge Eugene Wedoff extended from Dec. 1 until Jan. 31 the deadline for United to file a reorganization plan without risk of a rival plan submitted by outside investors. Wedoff also approved United’s agreement with its lenders to temporarily ease its loan requirements.

United, which already has cut $5 billion from annual expenditures since filing for Chapter 11 bankruptcy in December 2002, has said it needs $2 billion more to emerge from bankruptcy.

Besides the $725 million in pay and benefit reductions, company officials have said they could save $650 million a year by terminating pension plans. An additional $655 million in non-labor cost savings, already identified, would put the company close to the $2 billion mark.

Last year, the pilots’ union agreed to reduce their pay by 30 percent and make further cuts through changed work rules. The additional 18 percent pay cut proposal comes about a month after pilots at bankrupt US Airways ratified a new labor contract that calls for an 18 percent pay cut on average.

AP-ES-11-24-04 1557EST