Oakland Aircraft Maintenance - Bankrupt United Airlines declined to comment Tuesday on reports it was closing a maintenance center at Oakland International Airport that employs 700 mechanics.
United's parent company UAL Corp. won the right to close aircraft maintenance centers in Oakland and Indianapolis as part of a preliminary agreement with District 141-M of the International Association of Machinists and Aerospace Workers South of San Francisco last week. Members of the machinists union will vote on the contract on April 29.
Oakland Aircraft Maintenance
The closure will leave United's maintenance center at San Francisco International Airport as the carrier's only maintenance facility in the country.
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It will be another blow to train drivers who have already taken a 13 percent pay cut as ordered by a bankruptcy judge. As part of the preliminary agreement with United, drivers will also forgo some previously planned wage increases and accept improved work rules and a 20 percent increase in health insurance costs.
United, the world's second-largest airline, employs about 16,000 people in Northern California and is the dominant carrier at SFO, accounting for half of all passengers and flights.
United spokesman Chris Brathwaite said the company would not comment on any prior agreements. United pilots and flight attendants vote independently in accordance with their own prior agreements. The carrier said it needs $2.56 billion in annual benefits and benefits by 2008 to become a competitive airline.
United took over the Oakland facility in 1988, Oakland Airport spokeswoman Cindy Johnson said, and pays Oakland Airport $3.4 million in rent annually. The 40-acre facility was built by Ed Daley in the early 1970s for his company, World Airlines, who used it as a hangar for maintenance and administrative headquarters.
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"UAL has spent $30 million over the last six to seven years to upgrade the facility," Johnson said. The facility, which includes office space, has four bays for parked aircraft and is large enough to accommodate four Boeing 747 and four Boeing 737 aircraft at a time.
Steve Grossman, Oakland Airport's director of aviation, said the airport has not received official notice from United of plans to close the facility.
Union officials also said that as far as they knew, the closing of the Oakland plant was not a done deal. But there are contingency plans if UAL closes the facility.
One option would be to move at least 700 jobs from United's Oakland plant to a maintenance plant in SFO. Its SFO facility, which employs about 3,600 workers, is the largest in United's global system.
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"In terms of seniority, they will be eligible to come to San Francisco," said Scotty Ford, District 141-M president. Ford said no specific number of jobs has been set and stressed the union has not heard a specific decision from UAL, but the union's priority is to keep as many jobs as possible.
"On our end, we're doing some work right now," Grossman said from the Oakland airport. "We are looking at alternative uses for the base" if United pulls out. Possible scenarios, he said, include leasing the facility to another airline, preserving it or demolishing it to add more than 1,000 parking spaces.
The San Francisco airport, which leases a 129-acre site with 3 million square feet of space to United, does not know what the airline plans to do, but would welcome the influx of jobs, SFO spokeswoman Kandache Bender said.
"United Airlines has been a loyal tenant of SFO for a long time," Bender said. "We worked with them during their Chapter 11 reorganization."
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Separately on Tuesday, United, which lost $3.1 billion last year and more than $7 billion since the mid-2000s, said the number of flights would fall 3.7 percent in May. United cut flights by 8 percent in April, bringing its reductions to 12 percent this year compared to the same months in 2002.
A total of 105 US flights and 24 international flights will be canceled as of May 5.
"We are reducing, not eliminating, service on select routes," United's Brathwaite said. The canceled flights include a direct flight from SFO to Sydney; Passengers from the Bay Area will fly to Los Angeles to connect to Sydney instead of going direct from SFO.
Brathwaite said the carrier hoped to resume cuts in June, providing customer demand - dampened by the war in Iraq, fears of terrorism, a weak economy and concerns about severe acute respiratory syndrome like the flu - finally shows signs of recovery.
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Brathwaite said United will resume previously suspended daily flights between San Francisco and Paris in May, as transatlantic routes have more traffic than transpacific routes.
Reorganizing in bankruptcy court during the worst recession in the industry's history, UAL reached temporary or permanent contracts with all of its unions by 2008. But it still risks not meeting the strict cash flow targets set by its financiers in the event of bankruptcy. UAL is in negotiations with its lenders to seek renegotiation of these claims.
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