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A bankruptcy court judge on Friday rejected a deal between the parent of United Airlines Inc. and its pilots, complicating the struggling carrier’s efforts to reduce costs by eliminating its employee pension plans. Judge Eugene R. Wedoff of the U.S. Bankruptcy Court for the Northern District of Illinois struck down the deal between Elk Grove Township, Ill.-based UAL Corp. and its pilots in which they agreed to swallow a 14.7 percent pay cut and pledged not to oppose a company effort to eliminate their pension plan. The pilots made the concessions in return for increased contribution to their new retirement plan and a $550 million convertible note that the company was to issue the group upon exiting Chapter 11. Wedoff rejected the agreement in part because it requires United to terminate the pension plans of its other unions. The judge urged the company and its pilots to work out a new deal that allowed the court to consider the pensions of other labor groups on their own merits. The agreement between the company and its pilots faced opposition from a number of groups, including several other United unions and the Pension Benefit Guaranty Corp. Those groups had argued that the agreement was overly generous to the pilots and that it could hinder the company’s ability to eventually emerge from Chapter 11 protection. United stopped making contributions to its pension plans in July after the federal Air Transportation Stabilization Board rejected the airline’s request for $1.6 billion in loan guarantees. The judge’s action comes as the court is preparing to hear arguments on United’s request to terminate its contracts with its flight attendants and mechanics. US Airways Group Inc., which also is under bankruptcy protection, on Thursday received court authorization to reject its pact with its mechanics. United has secured more than $2 billion in labor cuts since declaring bankruptcy more than two years ago, but it says it needs an additional $725 million per year in concessions to attract sufficient outside funding to continue operations. The company says it needs to extract those cuts in the weeks to come to comply with the terms of its debtor-in-possession financing. Copyright �2005 TDD, LLC. All rights reserved.

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