United, pilots' negotiators reach tentative contract agreement

Tuesday, December 14th 2004, 1:29 pm
By: News On 6

CHICAGO (AP) _ Negotiators for United Airlines and its pilots' union have reached a tentative agreement on a new contract, the two sides said Tuesday.

The agreement makes the pilots the first of United's four big unions to come to initial terms on the latest round of cuts at the bankrupt airline. All four have balked at United's proposals this fall but risk having the company's terms imposed in bankruptcy court if they do not reach a settlement.

The deal has yet to be approved by the union's leadership, which has scheduled a meeting on Thursday to decide. Details were not disclosed.

``United is pleased to have reached a tentative agreement with the Air Line Pilots Association on the cost savings the company needs to secure the exit financing necessary to restructure successfully,'' company spokeswoman Jean Medina said.

The pilots' union informed its members of the agreement Monday.

``We do have a tentative agreement with the company,'' union spokesman Herb Hunter said.

The deal, if signed off on by union leaders and then ratified by rank-and-file pilots, could help enable United to avoid a potentially devastating labor showdown. Difficult negotiations with unions representing the mechanics, flight attendants and ramp and public contact workers remain unresolved, however.

The nation's No. 2 airline, a unit of Elk Grove Village, Ill.-based UAL Corp., said this fall it needed to impose an additional $725 million in annual labor cuts. The airline's employees have already made $2.5 billion in annual labor concessions.

On top of that, the company is moving to eliminate defined-benefit pension plans as it seeks to become leaner and more competitive after losing more than $9 billion in the past 4 1/2 years.

The airline, which has been in Chapter 11 bankruptcy since December 2002, has been seeking $191 million in annual savings from the pilots' contract.

United has said it will ask to have the lower pay and new benefits structure imposed by a bankruptcy judge if the unions don't agree to new contracts by mid-January.