United needs $500 million more in cost cuts

/ Source: The Associated Press

United Airlines has notified a bankruptcy judge that it needs to cut $500 million more in costs than previously stated.

The disclosure was made Thursday in a filing that was intended to update the judge before a hearing Friday on the airline's status, the Chicago Tribune reported.

"In light of sharp increases in fuel prices and the persisting weakness in yields, there is no hiding from the unpleasant reality that, to secure exit financing not guaranteed by the (Air Transportation Stabilization Board), the company believes that it will require hundreds of millions of dollars in additional cost reductions _ indeed, in the neighborhood of $500 million," the filing said.

United has not decided where the new cuts will come from, spokesman Jeff Green told the Tribune.

The cuts would come on top of $600 million in cost savings that the company announced two weeks ago. The job cuts and outsourcing in maintenance and airport operations would save closer to $655 million, chief executive Glenn Tilton told an aviation group Thursday.

A union representative told the Tribune that he was not aware of the additional cuts, or if they would affect workers. United has about 62,000 employees, down from more than 100,000 three years ago.

"We haven't been advised of any new cost-cutting programs by United Airlines," said Joseph Tiberi, a spokesman for the International Association of Machinists and Aerospace Workers.

In its filing, United also outlined ways in which it planned to keep in closer touch with its unions. The carrier said it is willing to work with its unions to "stress test" its belief that employees' pension plans would need to be terminated.

United angered its employees when, desperate to conserve cash, it stopped contributions to its pension plans and then said in August that the funds likely will be terminated as it seeks to attract financing.