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United Airlines Inc. reiterated Monday its plan to void employee contracts in the coming months if the bankrupt airline cannot reach new deals with its workers. The Elk Grove Village, Ill.-based carrier said in a filing with the U.S. Bankruptcy Court for the Northern District of Illinois that it would ask the court on May 11 to replace agreements with its mechanics and machinists should those groups not agree to new deals by then. The airline, a unit of UAL Corp., is also seeking permission to terminate its pension plans. The airline, which has already cut labor expenses by more than $2 billion, seeks about $725 million in new wage and benefit givebacks. United has already reached new deals with its pilots and flight attendants worth about $311 million annually. The filing restates a warning the airline issued to its employees in December. United said at the time that high fuel prices had boosted its projected 2004 costs by $1 billion and raised expected expenses between 2004 and 2010 by $7 billion, requiring further cuts. United said it needs the savings from employees to maintain an adequate cash balance and attract financing to exit bankruptcy. But the airline”s workers are clearly frustrated by the level of cuts they have had to swallow. Talks continue between representatives of management and the remaining union holdouts. However, the unions have also threatened to strike should United succeed in rescinding their contracts in court. UAL has operated under Chapter 11 protection since December 2002. Company officials have publicly expressed optimism that United might emerge from bankruptcy by year’s end, although that will not be possible until it can attract up to $2.5 billion in exit financing. Industry sources have said United might be better off delaying its bankruptcy exit in hopes that oil prices eventually decrease. Copyright �2005 TDD, LLC. All rights reserved.

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