UAL Accepts Pay Raise For Mechanics

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UAL Corp., parent of United Airlines, said Tuesday it accepted the recommendations from a specially appointed Presidential Emergency Board that it give mechanics a pay raise, potentially avoiding a strike at the No. 2 U.S. carrier.

Spokeswoman Susana Leyva said the carrier's labor committee late in the day accepted the recommendations from the board, which were made over the weekend. United had sought to freeze pay for some 15,000 mechanics at it tries to return the airline to profitability.

The board, appointed by President Bush to help mediate a long-running contract dispute between United and its mechanics, said the airline should offer raises of up to 37 percent for the top scale upon signing a deal.

The mechanics' contract came up for renewal in July 2000. Negotiations began in December 1999 and have been stalled despite federal mediation. Mechanics have been working without a pay raise since 1994.

"Although it has expressed serious reservations with detailed recommendations contained in the PEB report, United today has decided to accept the report's recommendations for contract settlement with the International Association of Machinists District 141M," UAL said in a statement.

The company said it understood the PEB's overall position in acknowledging the reality of United's financial condition while also pointing to the difficult position of District 141M, whose membership have been working at 1994 wages.

International Association of Machinists spokesman Frank Larkin said the airline would have to formally propose the raises to the union leadership, which would then put it to members for a vote.

United told the board this month in closed hearings it was losing $15 million per day and could not afford the increase. Instead, the airline is seeking to freeze pay for some 15,000 mechanics until it can return to profitability. After that, it would agree to "target rates" that would meet or exceed those at rival American Airlines.

United mechanics have authorized a strike, which could begin Feb. 20, after a 30-day cooling off period. By appointing the special board, the Bush administration avoided a potentially disastrous pre-holiday work stoppage.

UAL posted a record net loss of $1.16 billion for the third quarter and will release fourth-quarter results — Feb. 1.

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