UAL reaches tentative contract with agents and reservations clerks

Better pension benefits and a 5.5% raise


April 24, 1999|By BLOOMBERG NEWS

CHICAGO -- UAL Corp.'s United Airlines, the world's largest airline, reached a tentative first contract yesterday with its newly unionized ticket agents and reservations clerks, who are among the industry's lowest-paid workers.

The one-year agreement with the International Association of Machinists would give the roughly 19,000 service workers improved pension benefits and a 5.5 percent raise as of April 13, 2000. It also would eliminate a separate, lower pay scale for workers hired after UAL's 1994 employee buyout. Those newer passenger-service agents, about 40 percent of the group, would receive an immediate 14.5 percent raise while the rest get a $750 signing bonus. The newer workers' pay had been capped at just under $9 an hour, about half that of workers hired before the buyout. The low pay prompted high turnover rates and contributed to customer service problems.

"United was seeing a lot of turnover among those people because the starting rates were really low," said Glenn Engel, an analyst at Goldman, Sachs & Co. "Hopefully, this will cut turnover and improve customer service."

The agreement is still subject to ratification by members. The votes will be counted May 27. The contract will be up for renegotiation next year when the Machinists' current contract can be amended.

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