United to Reveal Cost-Cutting Plans

CHICAGO â€”  United Airlines Chief Executive Jack Creighton told employees that unions of the nation’s No. 2 carrier will be informed by the end of this week about cutbacks it’s recommending to avoid a bankruptcy filing.

The proposals, expected to include substantial pay cuts and other concessions, are part of a recovery plan that struggling United is overhauling in hopes of getting a $1.8-billion federal loan guarantee and ensuring an end to its long financial slide.

“By cutting our costs, we can get ourselves back on track,� Creighton said in his weekly taped message to employees.

UAL Corp.’s United announced Aug. 14 that it might have to file for Chapter 11 bankruptcy protection this fall if it didn’t reach major cost-saving agreements within 30 days with its employees, vendors and lessors.

In a series of meetings with union officials since then, Creighton said United has been “opening the airline’s books so the unions’ financial experts can confirm the serious nature of our economic predicament.�

Once the airline’s recommendations for each union are shared later this week, he said, United will pursue an amended application for the loan guarantee that it intends to file by Sept.16 with the Air Transportation Stabilization Board.

Creighton told employees the airline is pursuing both labor and non-labor cost savings and is looking to raise revenue by adding flights to certain profitable routes.

United’s pilots, who own about 28% of the company, had been scheduled to vote starting last week on a proposed 10% pay cut.

But that vote was postponed indefinitely in light of the carrier’s push for even bigger cutbacks and cost savings.

The machinists’ union has not been informed of United’s specific proposals, spokesman Joe Tiberi said Monday.

Leaders of the third big union, representing flight attendants, are scheduled to meet with United executives today.

Shares of UAL rose 39 cents to $4.12 on the New York Stock Exchange.