United Airlines Considers Outsourcing Jobs At 28 U.S. Airports

(Reuters) – United Airlines is assessing whether to outsource jobs at airports around the country in a cost-cutting effort that could impact some 2,000 workers.

The Chicago-based carrier informed employees Monday that jobs up for review included baggage handlers and gate and customer service agents at 28 airports that are not hubs, ranging from Atlanta to Anchorage. It has yet to make any decisions.

The potential outsourcing marks another step the carrier could take to help meet the goal it laid out in 2013 to cut costs by $2 billion annually. United said in an investor update Friday that it expects 2014 unit costs to increase up to 1.4 percent year-over-year, excluding fuel and other special charges.

The outsourcing review comes on top of plans announced in July to outsource more than 630 jobs.

“We need to ensure that our costs are competitive,” company spokesman Luke Punzenberger said.

United likely has faced pressure from Delta Air Lines , which has kept costs low because many of its workers lack union representation, according to a source familiar with the situation.

It was unclear how much United could save through outsourcing.

Most of the jobs under review are held by workers who were employed before April 2006, whose union contracts prevent them from being furloughed, the source said.

If United decides to proceed with outsourcing, it would have to offer these workers a job elsewhere in the company, although employees could decline, according to the source.

The International Association of Machinists and Aerospace Workers, which represents those potentially affected by the review, learned several months ago that the carrier had asked contractors to submit proposals to perform ground handling work at several stations, union official Rich Delaney said in a bulletin posted on the union’s website over the weekend.

Now that United has notified the IAM officially of its review, it will enter negotiation with the union to see how it could retain workers within the airline. The Wall Street Journal reported that the union plans to meet with United on Tuesday.

Shares of parent company United Continental Holdings Inc rose about 0.89 percent to close at $65.92 on Monday.

(Reporting by Jeffrey Dastin; Editing by Leslie Adler)

Read it at: http://www.businessinsider.com/r-united-airlines-considers-outsourcing-jobs-at-28-us-airports-2015-1#ixzz3P07hzw3p


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