United Airlines asked a bankruptcy court Wednesday to terminate its union contracts if the carrier can't get an additional US$725 million in cost savings from employees by mid-January.
The US' No. 2 airline says it needs the additional labor concessions and the ability to drop traditional pensions to secure financing and get out of bankruptcy. The cuts would come atop the US$2.5 billion United employees have already made in annual labor concessions.
In its court filing, the company said it "is committed to attempting to negotiate agreements with its unions on the required savings, but its urgent financial needs compel the company to file this motion in case consensual resolutions cannot be reached."
The additional labor cuts include US$191.1 million for pilots, US$137.6 million for flight attendants, US$101.2 million for mechanics and airplane cleaners, US$2.9 million for flight controllers and US$180 million for ticket agents, baggage handlers and other employees who deal with the public.
In its filing, United's parent UAL Corp also said it was proposing a one-time 4 percent pay cut for all employees from Jan. 1 until the carrier exits bankruptcy "to help weather the remainder of the bankruptcy."
A hearing on the motion was scheduled for Jan. 10.
United has already given its pilots' union a series of proposals for achieving the wage and benefit cuts the carrier says it needs to pull out of bankruptcy -- from a straight 18 percent pay cut to smaller cuts and changes in work rules.
The proposal is contained in an analysis by the Air Line Pilots Association negotiating committee The Associated Press obtained Wednesday. United made the suggestions last week.
Pilots' spokesman Dave Kelly called the proposal "an opener" in negotiations with United.
"Nothing is set. There's nothing definite," said Kelly, who would not comment on details of United's suggestions or the ALPA committee's analysis of the proposal.
United spokeswoman Jean Medina agreed the proposal is just a start. "We're very open to sitting down and discussing what options the unions might like to put forth to meet those same savings," she said.
Medina said Wednesday's court filing was procedural and the "next step to begin the process."
The Association of Flight Attendants declined comment on Wednesday's filing but it has already promised to fight the company "over every dime" of its plan for another round of cutbacks.
According to the pilots' union negotiating committee's analysis, United is also proposing that it be allowed to cut pilots' wages another 4 percent if necessary for a period of six months after the airline emerges from bankruptcy.
The analysis, distributed to all the airline's 6,400 pilots, indicates that if they accept "all the work rule and benefit erosions" proposed by the airline, their pay would be cut 8 percent. Or, the analysis continued, the union "may remove some of the work rule concessions with the additional pay cuts up to approximately 18 percent."
Among the proposed work rule changes is increasing the time pilots of the biggest jets fly from 85 hours a month to 95 hours a month, eliminating the premium pilots are paid for flying late at night, and reducing sick leave pay.
United, which already has cut US$5 billion from annual expenditures since filing for bankruptcy in December 2002, has said it needs US$2 billion more to emerge from bankruptcy.