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Fri, Mar 14, 2003

United Comes to 'Crunch Time'

Monday: First Deadline to Junk Union Contracts

UAL, the parent of United Airlines, can tell Bankruptcy Court Judge Eugene Wedoff Monday, that it would like the Court to nullify existing union contracts. That deadline, long looming but ignored publicly by the unions like an unwanted elephant in the living room, has now gotten the attention of some major players.

Some contract, and the degree of clarity it offers, is better than no contract and the caprice of the Court and creditors' committee, United's ALPA representatives are thinking, according to a Kelly Quigley story in Crain's Chicago Business. In fact, she says, "The head of United Airlines’ pilots union says the carrier's expected March 17 request to void its existing labor contracts puts even more pressure on United pilots to hammer out a new pact with their bankrupt employer."

With UAL stock's staying below a dollar, and heading slowly lower for a week, and the ESOP's trustee's requesting permission to sell another 5 million shares, and the "employee ownership" of the airline now a thing of the past, this weekend shapes up to be an interesting one, for all concerned.

Couple this week's developments with United's announced plans to launch a low-fare carrier, and we can further guarantee a series of lively discussions.

Future dates of interest, besides Monday, are April 1, when Judge Wedoff will formally hear United's expected request; and May 1, when, if renegotiated deals aren't acceptable, United will wipe the contracts out, and start anew.

FMI: www.ual.com

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