Bankrupt US carrier United Airlines and its machinist union reached a deal to save the airline $175 million a year and allow it to terminate pension plans covering 20,000 active machinists and other workers and thousands of retirees, The Wall Street Journal reported.
The five-year agreement with the International Association of Machinists and Aerospace Workers would move United, a unit of UAL Corp, closer to achieving the $700 million in annual labour savings it says it needs to exit Chapter 11.
Details of the agreement will be presented to the IAM members on Tuesday, according to the Journal, and voting is set to conclude by July 22.
The IAM represents about 20,000 active United employees who work in baggage handling, public contact, security and other areas.
On Friday, the IAM urged its members to ratify the contract.
The union's recommendation came two-and-a-half weeks after the IAM reached an agreement in principle with United. That agreement was enough to head off a court ruling that could have voided the workers' collective bargaining agreement.
United had asked for court permission to terminate the collective bargaining agreements it had with any union that had not given the concessions the airline needed to meet its labour cost-savings target.
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