=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2002/11= /12/BU118933.DTL ---------------------------------------------------------------------- Tuesday, November 12, 2002 (SF Chronicle) UAL, attendants OK tentative wage cuts David Armstrong, Chronicle Staff Writer United Airlines, struggling to stay out of bankruptcy, secured a tentati= ve agreement for $412 million in wage concessions from flight attendants, even as the airline said it plans to furlough 2,700 flight attendants in an attempt to slash operating costs. The announcements, made during the weekend, came just before Chief Financial Officer Jake Brace of UAL Corp., United's parent company, went before the Air Transportation Stabilization Board in Washington on Monday. Brace is scheduled to meet with the board again today. United has applied for a $1.8 billion government loan guarantee from the board, which was formed to help ailing U.S. airlines after the Sept. 11 terrorist attacks caused business throughout the industry to plummet. The government board last week publicly released a letter seeking a more detailed blueprint for cost savings from the airline. United, the world's second-largest carrier, has lost $4 billion since the start of 2001, when losses began to mount in the weakening economy. In an attempt to return to the black, United is seeking $5.8 billion in wage savings from pilots, flight attendants, mechanics and salaried staff during the next 5 1/2 years. United's tentative agreement with its 26,000 flight attendants, which mu= st be ratified by members of the Association of Flight Attendants and UAL's board of directors, was the third such agreement in little over a week. On Nov. 2, the company's 42 meteorologists agreed to accept 8 percent wa= ge cuts, effective Dec. 1. On Nov. 4, the Air Line Pilots Association agreed to cuts that, if approved by its 8,800 members and the UAL board, will total $2.2 billion during the next 5 1/2 years. Separately, United's mechanics on Monday resumed negotiations with UAL management after a two-week break. The 37,000 mechanics represented by the International Association of Machinists have not yet reached agreement on savings with United and are the last holdouts. United, which employs 16,000 workers in Northern California, is the largest airline at San Francisco International Airport, accounting for half of all passengers and flights. The airline did not disclose how many Bay Area flight attendants could be furloughed, but said Monday that furloughs -- part of a post-holiday 12 percent reduction in flights and staff -- will begin on Jan. 31. News of the apparent deal with the flight attendants boosted UAL stock b= ut left some Wall Street analysts unimpressed. Jamie Baker, an airline analyst with J.P. Morgan, said that United, currently losing an estimated $9 million daily, could be out of cash by January if it doesn't secure the government loan guarantee. Gary Chase, an analyst with Lehman Bros., said even the loan guarantee m= ay not be sufficient to keep United from following US Airways into Chapter 11. "Nothing but ATSB's decision matters, and we are still decidedly not optimistic," Chase told Reuters. UAL shares traded after hours at $3.60 per share late Monday. Shares closed at $3.57, up 29 cents, or 8.84 percent, at the end of trading Monday on the New York Stock Exchange. E-mail David Armstrong at davidarmstrong@sfchronicle.com., Chronicle news services contributed to this report.=20 ---------------------------------------------------------------------- Copyright 2002 SF Chronicle