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Mon, Mar 25, 2002 - Page 21 News List

United to recall thousands of workers

AIRLINES The US-based air carrier plans to call back as many as 2,200 workers after business is picked up in Chicago, Washington, Los Angeles, San Francisco and Denver

BLOOMBERG , CHICAGO

United Airlines, which laid off about 20,000 workers after the Sept. 11 attacks, will recall as many as 2,200 employees in five major cities because of an increased June flight schedule.

The world's second-biggest carrier will recruit as many as 900 new workers if laid-off employees choose not to relocate for the jobs, said Chris Brathwaite, a spokesman for the UAL Corp unit. The baggage handler, customer service and cleaning jobs are in Chicago, Washington, Los Angeles, San Francisco and Denver.

United and some rivals have begun adding back flights in advance of the summer travel season and to meet the gradual increase in passenger traffic since the Sept. 11 attacks doused demand. United eliminated about 20,000 jobs after the hijackings.

The return of workers is a positive sign, analysts said.

"Cutting employees is very difficult and you're not going to bring them back just on a gamble," said Joel Denney, a US Bancorp Piper Jaffray analyst who tracks airline debt. "You're going to bring them back when you have reason to do so."

United said its seat and flight capacity will be about 17 percent below the year-earlier level even after the June schedule increase. The airline is restoring 77 flights in Chicago by June 7 and didn't say how many flights it will add in the other US cities or to the whole network. Earlier this month, United rehired about 660 flight attendants.

Chicago-based UAL's shares rose US$0.56 to US$15.70 and have lost 50 percent of their value in 12 months.

The airline announced the increased flight schedule earlier this month in advance of the U.S. summer travel season. United declined to say how many flights will be added to its overall system. The Wall Street Journal reported after the announcement that 170 flights would be added overall.

The Chicago-based carrier has focused on restoring service in major cities to increase the frequency of flights mainly to better serve business travelers.

Passenger traffic, or miles flown by paying passengers, has been rising a few percentage points each month since the attacks mainly because of increased leisure travel. Most major US carriers, including United, have said that average fares remain low because of less business from high-fare corporate travelers.

February's average fare for US travel declined 14 percent from the year-earlier month to US$128.93 for a 16,000km trip, according to the Air Transport Association, the airlines' trade group in Washington. There was a 12 percent drop to US$379.94 for a 26,000km international trip, the interest group said. The statistics exclude discount carrier Southwest Airlines Co.

The domestic ticket prices have been down for 12 months, with declines of more than 10 percent for the past seven months, the group said in a statement on its Web site.

"Airlines have reduced prices in a continued effort to increase demand, but unfortunately with a loss of revenue," David Swierenga, the association's chief economist, said in a statement.

Passenger revenue for major US carriers excluding Southwest fell 23 percent in February over last year, the association said. Unit revenue, or revenue for a seat flown 1km, fell a smaller 10 percent because of the reduced service.

United said that its February passenger traffic, or distance flown by paying passengers, was 13.8 percent lower than last year.

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