United plans to use 40 jets for low-cost unit = = = = Tuesday July 15, 12:37 PM EDT = (Adds details, Tilton quote, background) By Meredith Grossman Dubner CHICAGO, July 15 (Reuters) - Bankrupt United Airlines said on Tuesday it = plans to use 40 planes from its regular fleet to start a low-cost unit de= signed to compete with discount airlines that are eating up its market sh= are. United and parent UAL Corp. (UALAQ) filed the largest bankruptcy in U.S. = airline history in December and has said that a low-fare, no frills airli= ne-within-an-airline would be part of the mix needed to restore profits a= nd emerge from court protection. United has been discussing its business plan with creditors for months bu= t has not made any details public about the plan -- or the proposed low-c= ost operation -- until now. = "Our initial first-year plan calls for a fleet of approximately 40 aircra= ft from our mainline fleet operating in key leisure markets," Chief Execu= tive Glenn Tilton said in a recorded message to employees. The low-cost operation is part of the company's transformation plan, whic= h is expected to be an important part of the final reorganization plan Un= ited will present in bankruptcy court. Analysts and unions have said the low-cost operation has become less esse= ntial now that the airline has won huge hourly paycuts for pilots on Airb= us A320s and Boeing 737s. The pilots union accepted $1.1 billion in annual paycuts earlier this yea= r as part of concession deals between United and its unions totaling $2.5= 6 billion per year. Pilots agreed to the paycuts after United said it wou= ld not operate the proposed low-cost unit with pilots represented by a se= parate bargaining agreement and separate seniority list. Even as the No. 2 U.S. airline works on developing a low-cost operation, = discount carriers like JetBlue Airways Corp. (JBLU) are expanding service= and ordering more planes. Delta Air Lines (DAL) kicked off a low-cost su= bsidiary, Song, in April. United said on Tuesday that Sean Donohue, vice president for the low-cost= operation, provided an update on the low-cost carrier, which has been ca= lled Starfish internally, to United's executive council during a regular = weekly meeting on Monday. A proposed route structure and some financial e= stimates for the operation were reviewed at the meeting, United said. In addition to grabbing a piece of the leisure market through a low-fare = operation, United is also trying to lure business travelers to its mainli= ne through several promotions announced recently. Once one of the most lu= crative parts of its business, business travel has suffered as a weak eco= nomy has forced companies to send employees on fewer trips or choose less= expensive travel options. (Additional reporting by David Bailey) = =A92003 Reuters Limited. = Roger EWROPS