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United awaits word on contract ratification

/ Source: The Associated Press

United Airlines will learn Monday if it has overcome a crucial hurdle in its bid to get its unions to agree to another round of wage and benefit cuts as its pilots’ and flight attendants’ unions finish voting on new labor agreements.

Analysts say securing those contracts is critical for the nation’s No. 2 carrier, especially in light of Friday’s announcement from United’s mechanics’ union that its members rejected a tentative agreement and voted to authorize a strike if a bankruptcy judge tears up its existing contract.

About 6,400 United pilots represented by the Air Line Pilots Association will finish voting Monday on a new contract that would cut pay by 11.8 percent, saving the carrier about $191 million in annual costs. Balloting also ends Monday for about 16,000 members of the Association of Flight Attendants, which are weighing a 9.5 percent cut that would trim about $138 million in costs.

United, a unit of Elk Grove Village, Ill.-based UAL Corp., is seeking to rewrite all its union contracts in an effort to save another $725 million in annual labor costs. The bid comes atop $2.5 billion in concessions it won in 2003.

United officials are expected to be in bankruptcy court on Monday to update a judge on the rejection of its contract agreement with the Aircraft Mechanics Fraternal Association. The carrier said Friday it will ask a judge to throw out the existing contract and impose new wage and benefit cuts to save nearly $100 million annually.

Even if the pilots and flight attendants ratify their contracts, the sides still must negotiate the issue of employee pension plans. United has said it needs to replace its traditional pension plans with a defined-contribution plan to save $4.1 billion over five years. The company stopped making pension contributions in July.