Contract Issues Focus of UPS Pilots, United Mechanics

The Independent Pilots Association (IPA), which represents UPS pilots, completed its strike authorization vote claiming it was supported by 99% of the 2,371 members who participated. However, under terms of the Railway Labor Act, they cannot strike while mediated talks are under way. Earlier, a UPS spokesman called the strike vote “normal rhetoric” during contract talks. A union spokesman said it was serious about closing the contract over the next two weeks. “We only hope that UPS management is as committed to finishing this contract as we are,” said IPA President Tom Nicholson.

In other airline news, United Airlines reported it had reached a tentative labor agreement with the union representing its mechanics. The deal, which must be approved by union members, includes a 3.9% per year pay cut on top of the original cuts of 14%.

The bankrupt carrier had recently won approval to eliminate its defined-benefit pension program. This reduces the estimated pension costs the airline would have had to pay from $900 million per year over the next five years to $255 million. Standard & Poor’s analyst Philip Baggaley was quoted as estimating the combined pension funding deficit at United’s competitors (American, Continental, Delta and Northwest) at more than $13 billion, with $1.4 billion in payments due in 2005.

United reported a net loss of $1.07 billion in the first quarter ended March 31, 2005.

An earlier agreement between the airline and mechanics was rejected.

For additional background:

UPS Pilots To Take Strike Vote
No Agreement Yet With UPS Pilots

United and Delta Take Another Hit
United Gets $500 Million Loan for 12 Months