United reaches deals
with all but one union

American rejects renegotiation

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By Dave Carpenter
Associated Press

CHICAGO >> Using the leverage of a looming bankruptcy-court deadline, United Airlines has secured the latest in a series of concessionary labor agreements with its unions.

The union representing baggage handlers and public contact workers became the largest group yet to come to terms, giving initial approval yesterday to contracts that would save the bankrupt carrier $2.6 billion over six years.

That leaves United needing to conclude negotiations with only its mechanics union in order to achieve the austerity cutbacks it seeks, although the mechanics have historically been the toughest group to bargain with.

Two weeks before United's December bankruptcy filing, they were the only union to reject wage concessions as part of United's last-ditch bid to avoid bankruptcy.

With the industry in crisis and United moving to have a bankruptcy judge void contracts and impose its own tough terms on May 1, the airline has made swift progress recently toward labor agreements aiding its cause.

Airline analyst Ray Neidl said United is progressing in bankruptcy and should be able to avoid liquidation "unless something really terrible happens with the economy or terrorism or Iraq."

"They're making slow progress," said Neidl, of New York-based Blaylock & Partners. "My best guess is they get everybody on board and ultimately get an approval vote, because they (the unions) realize the alternative is the court mandating the cuts, which would be even deeper."

CEO Glenn Tilton said the accords announced yesterday, which still need approval by the executive board of Machinists' union District 141 and its 23,000 members, are "another essential step forward" for a carrier that lost $3.2 billion last year.

United is intent on reducing its labor expenses by $2.56 billion a year through 2008.

Meanwhile, United flight attendants said today they plan to begin voting starting April 16 on whether to accept labor concessions totaling more than $1.8 billion over six years to help the airline survive its restructuring. Union leaders recommended voting to approve the agreement.

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American rejects
renegotiation

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Associated Press

DALLAS >> Labor leaders at American Airlines warn that workers could reject concessions designed to save the world's largest carrier from bankruptcy, but the company has declined to renegotiate the deals.

Results of the voting by employees are expected by April 15, and a company spokesman said yesterday that American would file for bankruptcy "very soon" if any of the unions reject concessions, which total more than $1.6 billion a year.

Leaders of unions representing pilots, flight attendants and mechanics struck last-minute deals March 31 as American executives warned that the company's lawyers were minutes from marching into bankruptcy court.