United Airlines is expected to report an annual net loss exceeding $2 billion in 2002 for a second straight year.

United Air shuttering
Ala Moana
ticket office

The carrier also plans to cut some
management jobs as part
of 1,700 cuts companywide

Star-Bulletin staff and wire

CHICAGO >> United Airlines, which put its Hawaii employees on notice this week that it would lay off a "significant number" of them as early as Jan. 19, wasted little time in announcing yesterday it was shutting down the state's only ticket office. The airline's latest cost-cutting move includes 1,700 overall layoffs, or about 2 percent of its work force.

The Ala Moana Center ticket office, one of 32 ticket offices remaining in the United States, will be closed Jan. 28. United spokesman Joe Hopkins said the center employs six people.

United Airlines "We'll be talking to them individually and telling them what options are available," he said.

The layoffs at the ticket centers -- those outside of airports -- involve 188 employees nationwide. United also said it was cutting nearly 1,500 management and salaried employees. Unlike the managers, most of the ticket center workers belong to unions and can be recalled.

United, which began the bankruptcy process Dec. 9, is taking these latest steps to meet the strict requirements of its Chapter 11 financing. The airline said it needs to reduce labor costs by $2.4 billion annually through 2008 to secure financing for operations during the bankruptcy and help it return to profitability.

Hopkins said some of those management and salaried employees may come from Hawaii but the geographic location of the 1,500 affected employees hasn't been determined.

"We know the number we need to achieve to get costs down but where the individuals are located hasn't been decided yet," Hopkins said. "That's probably a couple weeks away."

The airline said the furloughs, as it refers to them, will take effect this month. It has until Feb. 15 to cut costs significantly or it could lose the remainder of the $1.5 billion in interim financing.

United also said it decided to close down its remaining city ticket offices based on customers' increasing shift to buying tickets online or calling United's reservation number.

The bulk of the latest layoffs involve the nearly 1,500 management and salaried employees whose nonunion jobs will be cut by Jan. 19 as part of United's organizational redesign, the Elk Grove Village, Ill.-based airline said.

"These changes are part of the process of creating a new business that is competitive, customer-focused and sustainable," said Sara Fields, senior vice president.

All of the ticket office closings are effective Jan. 28. The 188 affected employees are represented by the Machinists' union.

United spokesman Jeff Green put the total number of jobs being cut at about 1,700. The airline, which employed about 100,000 people before the 2001 terrorist attacks, currently has about 83,000 on its payroll.

No dollar figure was given for the amount that will be saved by the moves.

While trying to negotiate steep pay cuts, United is seeking to impose emergency, temporary wage reductions. Four of its five unions are voting on whether to ratify the cuts, but the machinists have objected.

Eliminating ticket offices reflects a growing tendency toward online purchasing -- one of many factors which have caused United to be unprofitable for the past 2 1/2 years. The company is expected to report an annual net loss exceeding $2 billion for 2002 for a second straight year.

While the toll-free reservations line will remain in operation, United said the call volume has dropped by 25 percent from a year ago. United is closing three of its 12 telephone reservations centers on Saturday -- in San Francisco, Long Beach and Indianapolis. Those moves, announced in October, will result in 686 layoffs.

Tickets also can still be purchased at United's airport counters.

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