CHICAGO – United Airlines (search) said Wednesday that further job cuts will be necessary as it continues slashing costs in order to get out of bankruptcy.
The nation's No. 2 airline declined to confirm or deny a published report that it is considering eliminating 6,000 jobs, about 10 percent of its work force, saying its business plan remains under revision and no final decisions have been made.
United spokeswoman Jean Medina said the carrier is in "productive" discussions with its board of directors, creditors committee, labor leaders and other key stakeholders, and said job cuts will be part of the overhauled business plan.
"We've said consistently we're moving forward on a wide range of cost-reduction initiatives and we've set some initial cost-saving targets in a number of areas," she said.
"It is clear that achieving cost competitiveness will require additional job reductions over time. But the details of how we achieve the savings we need and the potential impact on our work force are still under discussion, so it would be premature for me to comment on specifics," Medina said.
The Financial Times (search), citing unidentified sources, said the possible 6,000 job cuts would be phased in over time as part of productivity changes and further outsourcing. The report said CEO Glenn Tilton (search) is to submit the revised business plan to the board by the end of this month.
United has about 62,000 employees, down from 100,000 before the 2001 terrorist attacks.
Spokesmen for the pilots' and machinists' unions said Wednesday they were not immediately aware of a plan to cut jobs.
Tilton said in a recorded message to employees a day earlier that the Elk Grove Village, Ill.-based airline has targeted cost-saving steps that would save $625 million in annual expenditures on its call center, maintenance, airport stations and commuter-carrier agreements. He did not detail how the savings would be achieved.
Asked if job cuts would be part of those measures, Medina said they "might" be.
Operating in Chapter 11 bankruptcy since December 2002, United already has imposed more than $2.5 billion in annual wage and benefit cuts on its employees. It was forced to seek more this summer when the government rejected its bid for a $1.6 billion loan guarantee that the airline said was essential to lining up bankruptcy-exit financing.
United subsequently angered its employees when, desperate to conserve cash, it stopped contributions to its employee pension funds and then said last month that it likely will terminate them as it seeks to attract financing.
Citing the move on pensions as the last straw, the flight attendants' union called Tuesday for new management and said it would take steps to seek the executives' replacement. Leaders of the Association of Flight Attendants (search) passed a resolution of no confidence in United's senior management, saying they have failed to return United to its former status as a pre-eminent airline.
United's revenues have shown improvement and its cost cuts have improved financial results, but it remains troubled by soaring jet fuel costs and discount competitors that have kept it from returning to profitability for the first time since 2000. Through July, it had a net loss of $700 million for 2004.