United, pilots reach deal on recovery plan

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By Kathy Fieweger

CHICAGO, June 14 (Reuters) - Pilots at UAL Corp.'s (UAL) United Airlines on
Friday reached a tentative agreement to take part in a financial recovery
plan, including concessions the No. 2 U.S. carrier says it needs to restore
financial health.

No terms were released by United or the pilots, represented by the Air Line
Pilots Association.

The deal is subject to UAL board approval and, after review by an executive
council for the union, ratification by about 9,000 rank-and-file pilots.

UAL Chief Executive Jack Creighton said earlier this week the airline would
apply for federal loan guarantees under the government's $15 billion aid
program set up after the Sept. 11 attacks if it can reach agreement with
employees on cost cuts. UAL has not yet said how much loan money it wants
the government to back.



If the pilots deal is approved, Creighton said in a statement it will result
in significant cost reductions for United while providing pilots with
"additional opportunities for participation in United's future growth."

FIRST STEP

Steve Derebey, spokesman for United's Air Line Pilots Association unit, said
the union leadership will review the plan on Monday. Pilots own about 28
percent of the company after a 1994 employee stock ownership plan. Mechanics
own about 20 percent and salaried and management workers, about 9 percent.

Flight attendants did not take part in the 1994 buyout, designed to foster
labor harmony that never quite came about.

UAL reported an industry record $2.1 billion net loss in 2001 and a net loss
of $510 million in the first quarter of 2002 as it fought a business travel
slump and weak demand for air travel following the Sept. 11 hijack attacks.

Union representatives for United mechanics and flight attendants said on
Friday they have no talks scheduled with the carrier and both balked at cost
cuts.

UAL has asked the 38,000 workers represented by the International
Association of Machinists to take 10 percent pay cuts and allow their
contracts to be extended, spokesman Joe Tiberi said on Friday. However, UAL
has not demonstrated a need for those cuts, he said.

The Association of Flight Attendants, representing about 25,000 United
flight attendants, has had general discussions with UAL about a business
plan, but the carrier has not presented any terms, spokeswoman Dawn Deeks
said.

The flight attendants agreement with United pegs their wages at the industry
average and they will not discuss cuts, Deeks said.


©2002 Reuters Limited.

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