UNITED TO OUTSOURCE CARGO HANDLING
United Airlines Cargo Division said Friday it will take advantage of labor terms in United's new contract with the International Association of Machine and Aerospace Workers to outsource warehouse and customer call center functions as part of cost-cutting measures taken to help the airline emerge from bankruptcy.
United Cargo said it would gradually shift cargo handling work to outside firms that have lower labor and system cost structures. United also said it will try to improve its freight accounting processes.
The IAM ratified a six-year agreement on wage and work rule changes earlier this week. The agreement follows similar concessions by the pilots and flight attendants unions to reduce benefits to help the company survive.
UAL Corp., the holding company for United, announced a first-quarter loss of $1.3 billion and operating loss of $958 million. In 2002 United lost $510 million including tax write-offs during the first quarter, with operational losses of $813 million. United said it is spending $2 million per day for operating purposes. UAL said it planned to $400 million to $500 million during the second quarter from the lower cost of labor and aircraft reductions.
United reported cargo revenue of $164 million, up 16.3 percent from $141 million during the first quarter of 2002.