United pilots tentatively OK pay cuts

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United pilots tentatively OK pay cuts
By Marilyn Adams and Dan Reed, USA TODAY

United Airlines might have cleared a critical hurdle in its bankruptcy=20
reorganization Thursday when its pilots union tentatively agreed to about=20
$1 billion a year in pay cuts. That news came as knowledgeable people on=20
Wall Street said American Airlines might be forced to seek bankruptcy=20
protection next week if it can't get concession deals with its unions.=20
American has told all its labor unions it needs answers from them by=20
Monday. The six-year deal between United parent UAL and the Air Line Pilots=
=20
Association's governing council now goes to pilots for a vote. UAL needs=20
the $1.1 billion a year in savings from the pilots, along with concessions=
=20
by UAL's other unions, to emerge from bankruptcy protection. UAL says it=20
needs a total of $2.5 billion a year in labor savings. Meeting that target=
=20
would help it satisfy the requirements of lenders that have lent UAL $1.5=20
billion so it can keep flying during bankruptcy. Talks with other unions=20
are continuing. "This breakthrough agreement is a significant step forward=
=20
in making the hard changes necessary to reposition United to compete," CEO=
=20
Glenn Tilton said. "Our pilots are to be highly commended." News from=20
American was less encouraging. At American, officials reached tentative=20
agreement Thursday with the bag handlers union on a deal that would save=20
about $300 million a year.

But it still needs deals with its other unions to restructure out of court.=
=20
American wants $1.8 billion in annual labor savings, including $660 million=
=20
a year from pilots. Pilots union spokesman Gregg Overman said the union's=20
board will vote on a concessions package by Monday. If it votes no, or the=
=20
savings aren't enough, American parent AMR could file within days.
UAL is poised to ask bankruptcy court Monday to let it impose up to 18% in=
=20
temporary pay cuts during the war, but it was unclear Thursday whether the=
=20
agreement with the pilots might lead to a delay. In Congress Thursday,=20
behind-the-scenes talks were underway to get quick aid for airlines whose=20
costs and bookings have been hit by the war. A $3 billion package being=20
discussed would help cover costs of new security measures the government=20
ordered after the terrorist attacks. Backers of the proposal =97 including=
=20
some top congressional leaders =97 favor tacking airline aid onto a=20
war-spending bill that Congress intends to approve before spring recess=20
starts April 11. But many members are reluctant to add measures that might=
=20
slow down action on funds for the war. Executives from several major=20
airlines met Thursday with Rep. Steny Hoyer, D-Md., the House Democratic=20
whip. The executives told lawmakers that a Chapter 11 filing by American=20
would put pressure on other airlines to consider following.

Contributing: Contributing: Kathy Kiely


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