Jumpseatnews.com - United Airlines flight attendant resources

Home > News > Quote of the Day

Quote of the Day

print
Source: Media Article

Date: Dec 16, 2004

Quote of the day comes from an article in today's Rocky Mountain News that states:

Flight attendants would face the largest wage gap compared with peers at major and midsize carriers, with average pay 7.5 percent less.

How do you like them apples?  Me neither.  Here's the entire story:

Source: Rocky Mountain News
Author: David Kesmodel

United Airlines, which is trying to persuade its workers to grant further pay and benefit cuts, said in a bankruptcy-court filing that its proposed new compensation levels still would surpass or rank close to those at other U.S. carriers.

As painful as concessions would be, compensation "as a whole would remain competitive," the airline said.

Average wages would exceed those at the 13 other largest U.S. airlines for utility, ramp and customer-service employees and would be close to the average wages for pilots, flight attendants and mechanics at the same carriers, United said.

Further, it said, most union workers would keep enjoying benefit premiums above 20 percent.

Flight attendants would face the largest wage gap compared with peers at major and midsize carriers, with average pay 7.5 percent less.

United said it needs labor concessions worth $725 million a year by mid-January or it risks breaching terms of its bankruptcy loans, which could ground the Chicago- based carrier. It also says it likely will terminate its pension plans to save more than $600 million a year.

"United must reduce its labor costs expeditiously," the airline said. "Under current projections, the company's cash balance will sink to precarious levels during the historically lean winter months, putting the entire operation at risk."

United must maintain at least $750 million in unrestricted cash under terms of its bankruptcy loans. Its lenders won't "tolerate inaction in the face of continued losses that imperil United's viability," it said.

Joe Tiberi, spokesman for the International Association of Machinists, United's largest union, declined to comment on any aspect of the carrier's filing. The union represents utility, ramp and public-contact workers, among others.

"We'll respond through the legal process but not through the media," said Sara Dela Cruz, spokeswoman for the Association of Flight Attendants, United's second-largest union.

The pilots union has reached a tentative pact with United on cost cuts. No details have been released. United earlier said it required $191 million in annual cuts from pilots.

The carrier has been negotiating with all its unions in hopes of reaching agreements soon after New Year's Day.

United made the voluminous filing in U.S. Bankruptcy Court in Chicago. It was submitted in support of its request that the court void its labor contracts and let it impose terms if negotiations fail.

United, the operating unit of UAL Corp., is the biggest carrier in Denver and the second-biggest U.S. carrier after AMR Corp.'s American.

The airline is struggling to climb out of bankruptcy after two years in court protection and after garnering $2.5 billion in annual labor concessions last year.

It said it projects an operating loss of $725 million next year if it fails to gain further concessions. In its bid for federal loan guarantees, which was rejected in June, it forecast a $1.27 billion operating profit. Operating results exclude interest payments and special gains or charges.

United has consistently failed to meet its executives' financial projections in recent years. It hasn't made a net profit since the Clinton administration.

In its filing, United emphasized that its performance suffered this year from higher-than-expected fuel prices. It also has been hurt by widespread low fares as it grapples with fierce competition from discounters.

United, which has cut fares on some routes in which it battles discounters, said it competes with low-fare airlines on more than 80 percent of its domestic routes, double the figure from a decade ago.

The company not only has been outperformed financially by most low-fare carriers, but it also has been outshone by most major airlines.

American, despite its own financial problems, posted a $211 million operating profit for the first nine months of 2004, while United posted a $284 million operating loss.

< Return to Latest News


Quick Find

Travel and Safety

And now a word from...

Printed from www.jumpseatnews.com. Have a nice day!