United Airlines, which emerged from bankruptcy Feb. 1, will cut another 1,000 salaried and management jobs by year end to further lower its costs, the carrier announced Wednesday.
The 11 percent reduction will help the world’s second-largest airline pare administrative expenses by about $100 million, chief executive Glenn Tilton said. United wants to trim total spending by $400 million this year.
The carrier has more than 5,000 employees in Denver and is the largest to serve Denver International Airport.
United announced the new savings target May 8, saying spending on jet fuel and labor boosted first-quarter costs by 3 percent for each seat flown 1 mile. The increase disappointed some investors, Tilton said.
“We are working hard to make sure we improve upon that number,” Tilton said at a New York transportation conference. “The second quarter already shows progress against not only that number but against the guidance we gave in the first.”
United, based in Elk Grove, Ill., a suburb of Chicago, has about 9,400 salaried and management jobs, Tilton said. About 650 of them are in Denver, with major operations at DIA and United’s training center in the Stapleton area.
The latest job cuts will occur across the company, spokesman Jean Medina said.
The airline reduced annual labor costs by $4 billion, including cutting more than 23,000 jobs, before its exit from bankruptcy. It said May 8 it expected second-quarter unit costs to be up 3 percent to 4 percent from the same period a year ago.
“It is a good first step, although I am not sure why this wasn’t done during the bankruptcy process,” said Susan Donofrio, a New York-based analyst for Cathay Financial who has a “neutral” rating on UAL.
Shares of UAL rose 78 cents to close at $27.81 Wednesday in Nasdaq Stock Market composite trading. The stock has fallen 30 percent since the company left bankruptcy protection Feb. 1.
Excluding a bankruptcy accounting benefit, United’s first- quarter loss widened to $306 million on fuel and labor spending.
In addition to the job cuts, United also will lower supplier costs by $200 million a year and cut spending on advertising and marketing by $60 million, Tilton said.
United in March said it would hire 4,000 employees this year, including about 200 in Denver. The 4,000 included about 2,000 flight-attendant positions.
“Today we are focused on improving the core business of United Airlines and getting the basics right,” Tilton said.
Denver Post staff writer Kelly Yamanouchi contributed to this report.
