United cost-cutting effort hits affiliates

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United cost-cutting effort hits affiliates

DENVER (AP) =97 Regional affiliates of the bankrupt United Airlines have=20
slashed wages and furloughed workers to meet United's demands for deep cost=
=20
cuts. United, Denver International Airport's dominant carrier, filed for=20
bankruptcy in December. With the ability to cancel contracts under=20
bankruptcy court protection, United has told its three United Express=20
carriers that if they don't lower costs enough, they will be replaced with=
=20
a competitor. Atlantic Coast Airlines, which operates United Express=20
flights from Chicago and Washington, has furloughed nearly 200 pilots, cut=
=20
wages of salaried workers by up to 40 percent and reworked its labor deal=20
with its pilots union.

Air Wisconsin Airlines, which flies from Denver to cities such as Montrose=
=20
and Grand Junction, had to win wage cuts and work-rule changes from its=20
pilots to submit a proposal with lower rates to United to continue their=20
partnership. SkyWest Airlines, which offers United Express flights out of=20
Denver, is close to landing a new contract and said it might have to cut=20
pay if the deal goes through. nited officials declined to comment about the=
=20
negotiations. ``There's a general trend toward cost reduction throughout=20
the industry, and we're certainly participating in that," said Rick Delise,=
=20
spokesman for Atlantic Coast.

United wants to cut costs by more than $100 million through renegotiated=20
contracts with its regional carriers. The airline has been renegotiating=20
for about two months. ``You can imagine the dilemma we face. We are bidding=
=20
on business we already have," Air Wisconsin chief executive Geoff Crowley=20
wrote in an e-mail to employees in April. ``We are being asked to work=20
within an entirely unreasonable time frame, and are forced to ask our labor=
=20
groups to do the same."

Air Wisconsin officials didn't return calls seeking comment. Crowley stated=
=20
in the e-mail that he believed there were seven carriers vying for United's=
=20
business: the three existing partners, Mesa Air Group, which will begin=20
flying United Express flights in July, and three others. Robert Mann,=20
president of airline consulting firm R.W. Mann & Co., said United's demands=
=20
are a part of the restructuring. ``The bankruptcy process has to look at=20
all suppliers and try to give equal haircuts all the way around," Mann=20
said. A silver lining for the affiliates is that United is allowed to use=20
more regional jets as part of a new labor pact with its pilots union. The=20
pact was reached after United filed for bankruptcy protection.

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