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United Reaches Pact With Mechanics Union

The airline still seeks a deal with the machinists and aerospace workers union.
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United Airlines' parent

UAL

and its mechanics union have hashed out a new contract that will save the bankrupt carrier $96 million a year.

In a press release late Monday, United said the tentative agreement achieves the cost savings it needs while addressing the union's concerns over job security and work rules.

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The deal averts a potential strike. The court overseeing the airline's bankruptcy has been holding a trial on whether to allow United to cancel the mechanics' contract and impose concessions if both sides couldn't reach an agreement. The union had threatened to strike if the court terminated its contract.

The agreement must still win approval from union rank-and-file, a group that in January rejected a previous tentative agreement with management.

The latest deal cuts wages by 3.9% and reduces sick-time pay.

With the mechanics' agreement in hand, United has wrangled a second round of concessions from all its unions except for the International Association of Machinists and Aerospace Workers, which primarily represents baggage handlers and public-contact workers.

The airline and IAM leadership have been in talks, but the court could cancel the union's contract if negotiations are unsuccessful.

Last week, the bankruptcy judge approved United's request to terminate its traditional pensions and hand over existing plan obligations to the federal government.