Layoff Announcement

United Airlines Plans to Trim 1,250 Jobs Amid Cost-Cutting Efforts
Mon Oct 21, 4:53 PM ET
CHICAGO -- UAL Corp.''s United Airlines announced several cost-cutting measures, including reservation-center closures and station conversions, that it says will result in about 1,250 job cuts.
United late Monday said it will close three reservation centers and a maintenance line and convert five small-market stations to United Express service. The company expects the cost cuts will save about $100 million annually.
United''s Chairman, President and Chief Executive Glenn Tilton said the airline is facing its toughest challenge ever and these are actions are unfortunately necessary given the current weak revenue environment.
Last week, the parent of the nation''s No. 2 carrier posted a third-quarter loss of $889 million, or $15.57 a share, on revenue of $3.7 million. At the time, UAL also warned that it would eat up even more cash per day in the fourth quarter in light of seasonal trends and continuing weakness in the industry.
Effective Jan. 7, United will convert its mainline flying to United Express service at stations located in Eugene and Medford, Ore.; Cedar Rapids, Iowa; and White Plains and Syracuse, N.Y. The company said its United Express carriers -- SkyWest, Air Wisconsin and Atlantic Coast Airlines -- can more efficiently serve these stations.
The conversion will result in the furlough of about 150 employees, United said.
United also will close down one of the airline''s three Boeing 757 maintenance lines at its Indianapolis center, resulting in the furlough of 250 mechanics from Indianapolis and the reduction of 160 line maintenance positions through schedule cutbacks.
In addition, United said that on Jan. 4, it will close its reservation offices in San Francisco, Long Beach and Indianapolis, resulting in the furlough of 686 employees. The company cited a 25% drop in call volume to its reservations line for the move. This leaves United with nine reservations centers in Chicago, Denver, Detroit, Honolulu, Seattle, Sterling, Va.; and Bloomington, Fort Wayne and South Bend, Ind.
United said it continues to review all aspects of its world-wide operations and will soon announce additional adjustments to its schedule and staffing levels. The carrier didn''t elaborate.
-Carolyn Gretton; Dow Jones Newswires; 609-520-7812; and Sonoko Setaishi; Dow Jones Newswires; 201-938-4148