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AIRLINES United reaches tentative agreement



Published: Mon, January 10, 2005 @ 12:00 a.m.



The flight attendants union said the contract does not address pension issues.

CHICAGO (AP) -- United Airlines reached a tentative contract agreement with its flight attendants union Saturday, but the deal does not address the employee pension plans that have become a key point of contention.

Although details of the contract were not disclosed, the Association of Flight Attendants said the contract does not include changes to employee pensions, which the Elk Grove Village-based airline said it must eliminate to save funds and emerge from bankruptcy.

Over the next 90 days, United said the two sides will work to resolve the pension issues.

"It [the tentative agreement] gives us the immediate cost savings we are seeking, and it leaves the pension issue to be resolved," said United spokesman Jeff Green.

The tentative agreement requires the approval of the AFA's executive council and its members, the labor group said. The executive council will meet Tuesday.

"We have fought management every step of the way to ensure that this agreement would not provide a penny more from flight attendants than is legally necessary," union head Greg Davidowitch said in a written statement.

United -- which reached a tentative agreement with its mechanics union Friday -- is seeking to rework its labor contracts for the second time in its two-year bankruptcy reorganization.

The carrier, a unit of UAL Corp., says it needs to save another $725 million in annual labor costs -- atop $2.5 billion in worker concessions it won in 2003 -- to maintain hopes of emerging from Chapter 11 bankruptcy.

Setback in court

The airline was dealt a setback Friday when a federal bankruptcy judge threw out a freshly ratified labor contract with the pilots union.

That agreement would have saved United $180 million annually and eliminated the pilots' defined-benefit pensions. But U.S. Bankruptcy Judge Eugene Wedoff took issue with a stipulation that other unions' pension plans also would have to be terminated for the pilots' agreement to take effect.

The company also was forced to withdraw agreements reached earlier this week with two small unions representing about 200 flight dispatchers and meteorologists because they contained stipulations similar to the one Wedoff objected to in the pilots' deal.




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