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Three major airlines announce big job or pay cuts

By Keith L. Alexander
The Washington Post

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United Airlines asked a bankruptcy court judge yesterday to approve an additional $2 billion in cuts from its operations. The airline is seeking to modify its existing labor contracts to slash $725 million in worker pay and benefits. It also wants to eliminate its four employee pension plans.

Delta Air Lines, which avoided a Chapter 11 filing late last month after its pilots agreed to vote on a $1 billion cost-cutting contract, announced plans to eliminate 2,000 maintenance jobs, nearly 3,000 customer service jobs and 1,800 management positions. The job cuts, which will begin Jan. 1, will be phased in over 18 months.

Delta's 7,000 pilots have until Thursday to vote on a new contract that will slash pay by 32.5 percent. Even if the pilots agree to the cuts, Delta executives have said the airline — the nation's third largest — may still have to seek Chapter 11 bankruptcy protection.

Also yesterday, Northwest Airlines, the nation's fourth-largest carrier, said its pilots ratified a two-year, $265 million concession package that includes 15 percent pay cuts. Northwest is trying to cut labor costs by $950 million annually, and is also in talks with its mechanics, flight attendants and transport workers.

The nation's airlines are entering their slowest travel period and are trying to find ways to boost cash levels to survive. High fuel prices also are weighing on the industry. The major carriers are facing sharp competition from low-cost rivals and have been unable to raise fares.

In its bankruptcy-court filing yesterday, United executives requested a Nov. 19 hearing to discuss the possible rejection of its labor contracts. The executives said they hope to reach "consensual" agreements with employees and asked the court to set a deadline. "Having a deadline often helps the parties in reaching a consensual resolution," United said in its filing.

But the flight attendants' union assailed United's plan as "disastrous," and pledged to fight United "over every dime."

The Association of Flight Attendants (AFA) said the demands are "not fair, equitable, nor necessary for a successful reorganization."

"The company's demands are disastrous," said Greg Davidowitch, president of the United branch of the AFA. "If management stands by these stipulations they will destroy United Airlines. We're not going to let that happen. We will fight them at the bargaining table and we will fight them in court."

Leaders of the pilots' and machinists' unions declined comment yesterday while each group met to pore over the new numbers.
 
If United and its unions don't reach an agreement, United would ask the bankruptcy court to reject the labor contracts and impose new, cost-cutting terms on its workers. Last month, US Airways made a similar request in bankruptcy court and was allowed to impose a 21 percent pay cut for the majority of its workers through February.

United said it needed the cuts by mid-January to "maintain adequate cash balances."

United spokeswoman Jean Medina said the airline also expected to announce additional job cuts because it will need "fewer employees going forward." The airline has about 62,000 workers.

Material from The Associated Press is included in this report.