United Airlines and its pilots union reached tentative agreement on a revised new contract yesterday, 11 days after a judge dismissed the previous deal as unfair to other unions...
CHICAGO — United Airlines and its pilots union reached tentative agreement on a revised new contract yesterday, 11 days after a judge dismissed the previous deal as unfair to other unions.
The pilots union’s leadership endorsed the agreement and sent it to the approximately 6,400 United pilots for ratification. Balloting is to begin tomorrow and go until Jan. 31.
Neither the company nor the union would release details, but United said the savings were similar to those outlined in the previous deal, in which pilots had agreed to a 15 percent pay cut. The pilots planned to discuss the new contract today.
If approved, the latest agreement will help United in its push to rewrite all its labor contracts to save costs for the second time in its 25-month bankruptcy. The airline, based in Elk Grove Village, Ill., says it needs to cut wages and benefits by $725 million annually — on top of the $2.5 billion in annual reductions made in 2003 — and eliminate defined-benefit pensions.
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The previous contract would have provided United with $180 million in annual savings and paved the way for it to terminate the traditional pensions. Pilots agreed not to fight the pension move in exchange for additional financial considerations.
But the flight attendants and machinists unions, joined by the government’s pension agency and a committee of United’s unsecured creditors, successfully opposed that deal. Bankruptcy Judge Eugene Wedoff ruled in their favor on Jan. 7, saying the deal unfairly forced the other unions to join the pilots in letting United end their pension plans.