United’s loan application was based, in part, on agreements by unions covering the company’s 81,000 employees for a package of takebacks totaling $5.2 billion. Organizations representing the pilots, flight attendants, and ramp workers had voted to approve the concessions. The 13,000 aircraft mechanics, members of the International Association of Machinists, rejected the $700 million in concessions they were handed, however.

With the rejection of the loan and the decision to file for bankruptcy, the company put aside plans to submit a new contract proposal to the mechanics. The IAM has reported that its members are owed nearly $500 million in back pay.

According to the Wall Street Journal, United’s chief executive Glenn Tilton said December 9 that he is "convinced that UAL must lower its labor costs more dramatically than it intended to in its loan guarantee application." Tilton said that "the carrier will work with its creditors, union leaders and other stakeholders to make major changes in UAL’s towering expenses, ‘costly, restrictive’ union work rules, routes, fleet and service."

If the company does not gain even larger savings than those already agreed to through "consensual negotiations with the unions... [United] intends to use the bankruptcy process to force changes on its labor contracts," reported the Journal.

The New York Times spoke just as bluntly in a December 10 headline that read, "Company to Seek Deeper Cuts From its 81,000 workers."

"Now people are wondering what’s going to happen. How deep will the layoffs be?" Rick Young, a ramp worker at United in Chicago, told the Militant.

A spate of airlines have filed for bankruptcy in the last few years, pressed by the increasing competition in the industry combined with the economic slowdown. Among them are TWA, US Airways, Continental, and America West. In the past, some companies operating under Chapter 11 have reorganized on a more profitable basis. Other times the assets of a given airline--from aircraft to flight schedules--have been seized by creditors and other carriers.

US Airways, which declared bankruptcy in August, has announced that it is seeking another round of concessions from its workforce. David Bronner, the chief executive of the company’s primary lender, Retirement Systems of Alabama, warned union members that if they didn’t agree to another $200 million in concessions, he would "Chapter seven [liquidate]" the airline.

American Airlines’ owners seek takebacks totaling up to $4 billion a year by 2004.  
 
 
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