Airline announces 1,250 job cuts

United Airlines is to axe 1,250 jobs and close three reservation centres as part of cost-cutting efforts aimed at saving the troubled US carrier about $100m (€102.7m) a year.

The announcement came three days after United, which is restructuring in an effort to stay out of bankruptcy, announced a 889 million-dollar third-quarter loss and said its operations had been losing about seven million dollars a day.

The airline, based in Elk Grove Village, Illinois, also said it would close a maintenance line and convert five cities to United Express service.

The announcement came as United prepared to file an updated business plan with the government this week, hoping to strengthen its application for further financial assistance by detailing cost cuts and the results of weeks of concession talks with unions and lenders.

United is seeking a 1.8 billion dollars loan guarantee from the Air Transportation Stabilisation Board to meet impending debt payments and help it return to profitability.

“United is facing its toughest challenge ever,” said Glenn Tilton, the carrier’s recently named chairman, president and chief executive.

“These actions are unfortunately necessary given the current weak revenue environment. Like other airlines, we need to make sure that we correctly match supply with demand.”

Tilton made clear he is still counting on unions to agree to substantially more cutbacks at the airline, which is 55% owned by its employees.

“These painful cuts will lower some of our costs, but they will not provide the labour-cost savings we need for our recovery plan to succeed,” he said.

United and the leaders of its five unions have agreed in principle on the need for $5.8bn (€6bn) in labour concessions over five years. But implementation of such an agreement hinges on separate deals being reached with each union.

United said that as of January 7 it would convert to United Express service in Eugene and Medford, Oregon Cedar Rapids, Iowa and White Plains and Syracuse, New York. It said United Express carriers SkyWest, Air Wisconsin and Atlantic Coast Airlines can more efficiently serve those cities.

The switch will result in 150 layoffs.

The No 2 US carrier said it would also close down one of its three Boeing 757 maintenance lines at its Indianapolis maintenance centre, resulting in the layoffs of 250 mechanics as well as an additional 160 line maintenance positions related to schedule reductions.

It will also close its reservations offices in Indianapolis, San Francisco, and Long Beach, California, on January 4, resulting in the layoffs of 686 employees. Nine reservations centres will remain.

The airline says it will soon announce “additional adjustments” to its schedule and staffing levels.

United currently operates more than 1,900 flights daily and has about 84,000 employees.