updated 9/16/2004 12:38:21 PM ET 2004-09-16T16:38:21

The head of United Airlines Thursday said the United States must follow the European Union example of pursuing airline mergers to revive the ailing industry.

Chief Executive Glenn Tilton said EU deals such as the recent tie-up of France's Air France and Dutch carrier KLM are constructive for the industry and eliminate "unnecessary inefficiency."

U.S. obstacles to airline mergers — such as taxes and fees — keep the industry from "competing as real companies compete," preventing it from addressing problems of excess capacity, he said.

United Airlines must face down pressure from labor interests to meets its goal of cutting costs by $655 million, Tilton told aviation industrialists.

That amount "is indeed the number we have targeted, and to the extent it results in fewer jobs, certainly there are going to be more job cuts," he said.

UAL Corp., the Chicago-based parent of United, has been operating in bankruptcy court protection since late 2002.

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