Wage Cuts for All United Airlines Salaried and Management Employees Go into Effect Next Week

United Airlines (NYSE: UAL) today announced that in an effort to address its continued losses and control costs, the company has included in its Chapter 11 filing an immediate initial pay cut for officers and salaried and management employees. The company this week will begin discussions with the leadership of its unions to reach consensual agreement on how represented employees will contribute to the company’s cost-control efforts.

“Filing for Chapter 11 is the means by which we can stem United’s continued losses and get our costs under control so we can transform our company into a more competitive airline,” said Glenn Tilton, United’s chairman, president and chief executive officer. “We have said for some time now that reducing labor costs are a critical component of our recovery effort and will need to be implemented as soon as possible.”

United’s officers will take an immediate pay cut averaging 11 percent of their  annual base pay. Salaried and management employees’ wage reductions will be based on current wages, ranging from 2.8 percent for employees earning $30,000 or less, up to 10.7 percent for employees at the highest management salary level. The wage reductions are effective Dec. 16. In addition to their wage reductions, all salaried and management employees have forgone their planned 2002 merit salary increase and a 2002 incentive payment.

United said that during its Chapter 11 case, it will maintain its ability to continue its global operations and continue its long-standing commitment to its customers, safety and reliability.