UNITED Airline, pilots reach agreement

An analyst says the pilots' agreement may lead other unions to approve deals.
CHICAGO (AP) -- United Airlines has secured a tentative contract agreement with its pilots, clearing a critical early hurdle in its effort to make another round of painful labor cuts in bankruptcy without needing a court order. The agreement, announced Tuesday, makes the pilots the first of United's four big unions to come to initial terms.
All four have decried the bankrupt airline's latest proposed steep cutbacks but risk having the company's terms imposed in bankruptcy court if they don't reach a settlement.
Details were not disclosed by either the company or the union's leadership, which meets Thursday in Chicago to decide whether to ask pilots to ratify it. But United, which has the weight of federal bankruptcy law on its side, has said any revised contract with pilots must provide $191 million in annual savings to the company.
"United is pleased to have reached a tentative agreement with the Air Line Pilots Association on the cost savings the company needs to secure the exit financing necessary to restructure successfully," company spokeswoman Jean Medina said.
Needs approval
The pilots' union informed its members of the agreement Monday night. "We do have a tentative agreement with the company," union spokesman Herb Hunter said, declining to elaborate.
The deal, if ratified by rank-and-file pilots, could help enable United to avoid a potentially devastating labor showdown. Difficult negotiations with unions representing the mechanics, flight attendants and ramp and public contact workers remain unresolved, however.
Airline analyst Ray Neidl of Calyon Securities said the agreement is important but it's too early to judge its significance in United's latest push to lower labor costs. The nation's No. 2 airline, a unit of Elk Grove Village, Ill.-based UAL Corp., said this fall it needed to impose an additional $725 million in annual labor cuts after already extracting $2.5 billion a year in concessions last year.
United has said it will ask to have the lower pay and new benefits structure imposed by a bankruptcy judge if the unions don't agree to new contracts by mid-January.
$191 million in cuts
The company last month gave the pilots' union a series of options on how to achieve its targeted $191 million in wage and benefit cuts -- from a straight 18 percent pay cut to smaller cuts and changes in work rules.
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