United to eliminate 1,250 jobs

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United to eliminate 1,250 jobs
By Chris Woodyard, USA TODAY

United Airlines plans to slash 1,250 jobs and turn more service over to=20
commuter affiliates, the latest in a series of cuts as the nation's=20
second-largest airline seeks billions of dollars in union concessions and=20
federal aid to ward off bankruptcy protection. United announced an $889=20
million third-quarter loss, its second biggest ever, on Friday. The latest=
=20
cutbacks, which will save an estimated $100 million annually, include:

=B7       Flights. United passengers will lose main-line service in White=20
Plains and Syracuse, N.Y.; Eugene and Medford, Ore.; and Cedar Rapids,=20
Iowa. Commuter affiliates take over the flights starting Jan. 7.

=B7       Reservations. Three reservations centers will be closed, leaving=
=20
nine to serve customers around the country. The centers and job losses in=20
each are: San Francisco, 516; Long Beach, 96; and Indianapolis, 74.=20
Reservations center call volume has fallen 25% since a year ago.

=B7       Maintenance. One of three Boeing 757 maintenance lines is being=20
closed in Indianapolis, resulting in the furlough of 250 mechanics. The=20
airline also is idling 160 maintenance positions around the country.

The changes, announced Monday, are among the "painful cuts" that will lower=
=20
costs, but still do "not provide the labor-cost savings we need for our=20
recovery plan to succeed," says United CEO Glenn Tilton. "It's not the=20
final step," aviation consultant Morris Garfinkle said of the cuts. "They=20
are just getting the skin off the fruit. They have to get down to the=20
seeds." The cutbacks strike hardest against members of the International=20
Association of Machinists. United officials met through the weekend with=20
IAM leaders in hopes of reaching concession agreements. "United is=20
undertaking restructuring efforts that are painful, and we're going to=20
continue to represent our members, whether they are on the job or on the=20
street," says machinists' union spokesman Frank Larkin.

As it negotiates with its unions, United this week plans to update a=20
business plan filed along with its application for a $1.8 billion federal=20
bailout loan. But Wall Street remains concerned that United won't be able=20
to cut deep enough to keep from having to file for bankruptcy=20
reorganization. "Relative to United's multibillion-dollar losses,=20
(Monday's) cost reductions are comparatively modest," says analyst Sam=20
Buttrick of UBS Warburg.



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