UAL Completes Union Negotiations, May Meet Loan Deadline

United Airlines parent, bankrupt UAL Corp., today announced a new labor agreement with the last hold-out union on labor concessions deemed necessary to keep the carrier operating. The agreement with the International Association of Machinists and Aerospace Workers District 141-M follows concession-laden pacts with all of United's other labor unions.

Had United failed to reach deals with all labor groups, totaling more than $2.5 billion in annual savings by this coming Monday, the carrier would have begun a proceeding in bankruptcy court to invalidate all collective bargaining agreements. Temporary wage reductions now in place are set to expire May 1, a crucial date in United's bid to hold on to debtor-in-possession financing. United will beat that deadline if all unions ratify their latest tentative agreements.

"With all of our labor groups aligned, I feel confident that United's transformation into a more efficient, effective airline, able to compete across markets and product lines, is on track to succeed," said UAL chairman and CEO Glenn Tilton.

Tilton, however, noted that the tentative agreement "presents some challenges." It still must be approved by the union's executive board and the UAL board of directors, and be ratified by the rank and file.

That ratification vote is expected to be completed by the end of the month. Meanwhile, membership voting soon will be finalized on United's tentative pacts with the Air Line Pilots Association, the Association of Flight Attendants, the Professional Airline Flight Control Association and IAM District 141.

Today's tentative agreement with IAM 141-M is an important milestone in United's bankruptcy reorganization as the union was the only labor group with which the carrier was unable to reach a consensual agreement during an earlier stage of bankruptcy reorganization. The bankruptcy court in January sided with company management and imposed temporary wage reductions.