updated 4/11/2005 7:28:33 PM ET 2005-04-11T23:28:33

United Airlines CEO Glenn Tilton reiterated the carrier’s intent Monday to eliminate unionized employees’ current pension plans and replace existing labor contracts as necessary to obtain bankruptcy exit financing.

Escalating fuel prices have left the airline in no position to compromise on its cutback plans, Tilton said.

United, a unit of UAL Corp., also planned to make its position clear in a bankruptcy-court filing late Monday. The company said the filing would state its intent to replace existing pensions and tear up collective bargaining agreements with the mechanics’ and machinists’ unions if they don’t agree to permanent pay cuts and other concessions by a May 11 trial date.

“Our view hasn’t changed — it remains the same,” Tilton told reporters Monday when asked about the continuing impasse in labor talks over contracts and pensions. “The only thing I would add is ... the external environment of fuel costs has gotten worse rather than better.”

Tilton said United is still targeting this fall for emerging from Chapter 11 bankruptcy, but only if it is able to reduce costs enough to satisfy banks that have expressed interest in providing $2 billion to $2.5 billion in exit financing. He characterized contract negotiations as “rigorous.”

United has been restructuring under the protection of federal bankruptcy law since December 2002. But it continues to lose money along with the rest of the airline industry due to high fuel prices, low fares and intensifying competition from discount carriers. Analysts project industry losses as high as $5 billion this year.

Tilton said in a speech to the City Club of Chicago that the industry needs to consolidate and, in comments afterward, cited last year’s merger creating Air France-KLM, the world’s largest airline, as a financial model.

He dismissed as a “false premise,” however, the notion that a carrier needs to go under for the industry to improve.

“It’s not a matter of US Air or Independence Air going out of business,” he told reporters. “That’s simply not going to make things better for everyone.”

As in previous labor showdowns, the unions representing United’s mechanics and other ground workers are threatening to strike if United has its own preferred wage and benefit cuts imposed in bankruptcy court without reaching agreements with employees.

The Association of Flight Attendants also threatened last Friday to tear up its own cost-saving deal with United, accusing company leaders of failing to demonstrate that they have cut their own salaries as promised.

Analyst Ray Neidl of Calyon Securities said there’s no assurance that employees will agree to further concessions on top of the ones they’ve already made. But he said there’s no alternative if United is to come up with bankruptcy exit financing.

Neidl also said that “this is the year when things will start changing” in the industry if jet fuel prices remain high, foreseeing either mergers or consolidation or liquidation.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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