United Announces Drastic Cuts

United Airlines said Monday that it is cutting 1,250 jobs and closing three reservation centers as part of cost-cutting efforts aimed at saving the troubled carrier about $100 million annually.

The announcement came three days after United, which is restructuring in an effort to stay out of bankruptcy, announced an $889 million third-quarter loss and said its operations have been losing about $7 million a day.

"United is facing its toughest challenge ever," said Glenn Tilton, the carrier's recently named chairman, president and chief executive. "These actions are unfortunately necessary given the current weak revenue environment. Like other airlines, we need to make sure that we correctly match supply with demand."

Tilton made clear he is still counting on unions to agree to substantially more cutbacks at the airline, which is 55 percent owned by its employees.

"These painful cuts will lower some of our costs, but they will not provide the labor-cost savings we need for our recovery plan to succeed," he said.

United and the leaders of its five unions have agreed in principle on the need for $5.8 billion in labor concessions over 5½ years. But implementation of such an agreement hinges on separate deals being reached with each union.

United said that as of Jan. 7 it will convert to United Express service in Eugene and Medford, Ore.; Cedar Rapids, Iowa; and White Plains and Syracuse, N.Y. It said United Express carriers SkyWest, Air Wisconsin and Atlantic Coast Airlines can more efficiently serve those cities.

The switch will result in 150 layoffs.

The nation's No. 2 carrier said it also will close down one of its three Boeing 757 maintenance lines at its Indianapolis maintenance center, resulting in the layoffs of 250 mechanics as well as an additional 160 line maintenance positions related to schedule reductions.

It also will close its reservations offices in Indianapolis, San Francisco, and Long Beach, Calif., on Jan. 4, resulting in the layoffs of 686 employees. Nine reservations centers will remain.

The airline said it will soon announce "additional adjustments" to its schedule and staffing levels.

United currently operates more than 1,900 flights daily and has about 84,000 employees.