Machinists and ground workers at bankrupt United Airlines threatened to strike following the federal Pension Benefit Guaranty Corp.'s announcement this month that it would assume responsibility for pensions covering 36,000 UAL employees.
Management repeatedly has insisted the company must terminate and replace existing pension plans in order to emerge from court protection this autumn, but PBGC said the plans it intends to replace already are severely underfunded. This latest development underscored the larger controversies of pension reform in the United States and drew a sharp rebuke from UAL labor leaders, who called on management to reach a new deal.
"If we are successful, the PBGC can abandon its attempt to terminate our members' pensions," said Randy Canale, president of the International Association of Machinists and Aerospace Workers, District 141. "Failure by United to reach an agreement with the IAM could lead to strike action."
On the revenue front, UAL executive vice president John Tague in an employee message said United twice in February raised fares, resulting in "material increases" in pricing for certain markets. Combined with competitive responses to more recent fare hikes initiated by Northwest Airlines, "United has largely offset the revenue degradation of Delta's SimpliFares," he said. Tague also noted a 4 percent improvement in year-over-year unit revenue performance and that United had "closed the gap relative to other majors."
Meanwhile, United last month said it would use an ARC data reporting tool to analyze citypair market information. ARC said reports include ticketed and settled transactions. Scott Brandt, United managing director of worldwide sales strategy said the airline's efforts to lower distribution costs (BTN, Feb. 7)
"will impact the quality of data we receive from traditional sources" such as market information data transfer sold by global distribution system operators.