United Airlines plans $1.3bn in wage cuts

United Airlines said it established a plan to cut wages for management and salaried workers by $1.3bn (€1.29bn) over a five-and-a-half-year period under its financial recovery program.

The program calls for most members of this group of non-union workers to receive wage cuts in the 2.8-10.7% range and to forgo merit bonuses.

If forgone 2002 merit raises were included, the reductions would be in the 5.2-15.3% range, with employees at the low end of the salary range contributing the least.

In addition, the company announced that in connection with the financial recovery program, it plans to issue stock options to all employees participating in that program.

UAL said the changes are scheduled to take effect on the same date for all other employee groups participating in the financial recovery program, which currently is expected to be Dec 1.

While management and salaried employees are not part of the United Airlines Union Coalition, this plan is consistent with the framework agreed upon by the coalition and the company, according to UAL Corp.