United announces 1,250 layoffs, other cost-cutting measures

Monday, October 21st 2002, 12:00 am

By: News On 6

CHICAGO (AP) _ United Airlines is cutting 1,250 jobs and closing three reservation centers as part of cost-cutting efforts aimed at saving the troubled carrier about $100 million annually.

Monday's announcement came three days after United announced an $889 million third-quarter loss and said its operations have been losing about $7 million a day.

The Elk Grove Village, Ill.-based airline is restructuring in an effort to stay out of bankruptcy. Its announcement Monday came as it prepares to file an updated business plan with the federal government this week, hoping to strengthen its application for further financial assistance by detailing cost cuts and the results of weeks of concession talks with unions and lenders.

United is seeking a $1.8 billion loan guarantee from the Air Transportation Stabilization Board to meet impending debt payments and help it return to profitability.

The airline said it will soon announce ``additional adjustments'' to its schedule and staffing levels.

``United is facing its toughest challenge ever,'' said Glenn Tilton, the carrier's recently named chairman, president and chief executive. ``These actions are unfortunately necessary given the current weak revenue environment.''

Tilton made clear he is still counting on unions to agree to substantially more cutbacks at the airline, which is 55 percent owned by its employees. United and the leaders of its five unions have agreed in principle on the need for $5.8 billion in labor concessions over 5 1/2 years. But implementation hinges on separate deals being reached with each union.

United currently operates more than 1,900 flights daily and has about 84,000 employees.