United pilots agree to wage cuts
Pilots at United Airlines have agreed to participate in the airline’s recovery plan.
The Air Line Pilots Association (ALPA) – which owns 28% of the airline’s shares – has given “tentative” approval to the cost-cutting scheme which will see pilots’ wages reduced by 10% over a three year period. United estimates this will lead to $520 million in cost savings.
In return for their agreement in the scheme the carrier’s 9,000 pilots will receive stock options in parent company UAL.
United chief executive Jack Creighton said: “The pilots have been creative and energetic in their search for solutions. I want to commend them for their willingness to sacrifice, and I hope that the leadership of our other represented employees follow the pilots’ lead.”
The pilots’ union has also agreed to work with the carrier to develop a “mutually acceptable” agreement that will allow United to codeshare with US Airways on domestic and international flights. ALPA has also agreed to “redefine limitations on regional jets” which should allow United to fly smaller aircraft on some domestic routes.
United – the second biggest carrier in the US – is facing severe financial difficulties. It lost more than $2 billion in 2001 and posted a $510 million loss in the first quarter of 2002.
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