United Airlines axes thousands of jobs

UNITED AIRLINES, America's second-biggest carrier, yesterday shocked the aviation world by announcing a swingeing package of cost-cutting measures involving thousands of job losses, a recruitment freeze, wage reductions, reduced services and the grounding of scores of aircraft.

In an effort to cut costs by dollars 400m ( pounds 270m) a year and stave off continuing losses caused by economic downturn and the turmoil in the US airline industry, United will:

Axe 2,800 jobs, bringing its worldwide workforce down to 80,000.

Scrap plans to hire 1,900 extra staff this year.

Impose a 5 per cent pay cut on all staff, with directors taking a 10 per cent reduction.

Reduce its domestic network and cancel plans to fly new international routes.

Ground 40 aircraft this year and accelerate its programme to retire older jets.

Trim further all capital expenditure programmes and areas of expense.

The latest measures follow United's announcement last month that it is negotiating a 'significant' reduction in its dollars 20bn aircraft order book.

United expects to announce a heavy loss in the fourth quarter of 1992 after losses of dollars 166m in the first nine months.

Stephen Wolf, United's chairman, blamed the draconian cuts on 'fundamental flaws' in the US airline industry and US bankruptcy protection laws that allowed competitors to operate indefinitely from a lower cost base, causing serious financial harm to the rest of the industry.

'This chaotic environment leaves us no choice but to take considerable and difficult steps to reduce our losses and ensure the long-term viability of United,' Mr Wolf said.

The recruitment freeze will take effect immediately, with 251 flight attendant trainees the first to be affected.