This article from NYTimes.com has been sent to you by psa188@juno.com. Pilots Rip United's New Business Plan January 30, 2003 By THE ASSOCIATED PRESS Filed at 10:28 a.m. ET CHICAGO (AP) -- United Airlines' new business plan is being met by harsh opposition from its unions -- turbulence that threatens its turnaround effort in bankruptcy. As CEO Glenn Tilton prepared to present the new strategy Thursday to UAL Corp.'s board of directors, the pilots' and flight attendants' unions ripped its plans for a new discount carrier as tantamount to a breakup of United. Pilots' union chief Paul Whiteford pledged on the eve of the meeting to fight the plan ``by every lawful means available to us'' -- sentiments echoed by the flight attendants' union. United declined to publicly release details of the new plan, which it said is aimed at transforming the company into ``a successful and aggressive competitor for the long term.'' It has said only that it intends to launch a discount carrier and wants to have leaner work force and $2.4 billion less in annual labor costs. But the flight attendants' union said it calls for eliminating anywhere from 20 percent to 40 percent of United's flights and make them part of the spin-off carrier with a separate set of lower-paid employees. ``The plan to form a separate, start-up carrier by siphoning off United's best assets may be a good plan for a new start-up carrier ... but it will be the demise of United Airlines,'' said Greg Davidowitch, head of the flight attendants' group. ``Why would, or why should, current employees give up thousands of jobs and other cuts to fund the start-up of a new carrier that will only benefit corporate executives and others while it competes with us and drags us down even further?'' he said Wednesday night. The world's second-largest airline, which has posted heavy losses since mid-2000, filed for Chapter 11 federal bankruptcy protection on Dec. 9. It is required to compile a new business plan in the first 120 days of bankruptcy to show its lenders how it intends to return to profitability. Whiteford, who also has a board seat, chided the management of the majority employee-owned company for its approach. ``Inexplicably, in the seven weeks since United filed for Chapter 11 bankruptcy protection, senior management has locked the pilots out of the process and refused to engage in any meaningful negotiations over our future,'' Whiteford said Wednesday. ``Instead, they appear to be proposing a plan to break up United Airlines by giving United routes, aircraft, and other assets to another company -- with a whole set of new managers and employees.'' United defended the plans for the new carrier in a statement Wednesday night. ``We believe that a low-cost carrier, fully integrated into a global hub-and-spoke network for the first time, will be a critical and dynamic element in United's future strength,'' the company said, pledging to continue to work with the unions on its restructuring. Numerous industry experts have expressed skepticism about United's intention to launch a separate discount airline, which CEO Glenn Tilton first disclosed last month as a way to compete with Southwest Airlines. But United contends the market has changed since earlier such efforts failed. Delta Air Lines also is establishing a discount carrier this year. United's employees already have taken temporary pay cuts while negotiations proceed toward long-term contracts. The pilots agreed to 29 percent wage reductions and flight attendants to 9 percent cuts, while the bankruptcy court imposed 14 percent cutbacks on machinists, who include mechanics, ramp workers and customer contact workers. The company reports fourth-quarter and full-year results on Friday and is expected to exceed the $2.1 billion loss of 2001 -- an industry record that has since been exceeded by American Airlines. Shares in United parent UAL Corp. fell 2 cents to $1.07 in morning trading on the New York Stock Exchange. ^------ On the Net: www.united.com http://www.nytimes.com/aponline/business/AP-United-Airlines.html?ex=1044962211&ei=1&en=339e6f53115d3386 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company