United Airlines continues efforts to avoid Chapter 11 bankruptcy filing

Airline Industry Information, Oct 28, 2002

AIRLINE INDUSTRY INFORMATION-(C)1997-2002 M2 COMMUNICATIONS LTD

United Airlines' flight attendants - represented by the Association of Flight Attendants - will take a 3.6% pay cut as part of the airline's plan to save USD5.8bn over five and a half years.

According to the union, those flight attendants with six or more years of service - about 85% of the airline's 24,000 active flight attendants - will take the pay cut. Under the proposal, the senior flight attendants will also give up a 2% pay raise in 2004, while all flight attendants will forego two lump sum payments due in March 2003 and March 2005.

Meanwhile, United Airlines is hoping to extend a debt payment owed to the German development bank KfW. The airline reportedly owes the Frankfurt-based company USD300m, which is due on 17 November 2002. Both parties are currently holding negotiations on the possible extension of the due date.

United Airlines has also approached its Star Alliance partners on strengthening ties between the carriers, in a further bid to avoid a Chapter 11 bankruptcy filing.

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