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More Trouble in the Air

Airline companies seem to be grabbing the headlines recently. Yesterday, I mentioned that Delta’s pilots offered to take a 23 percent pay cut to resolve a bitter talk. Today, United Airlines says it will miss more pension payments, including nearly $500 million in contributions due this fall.

The airline, which has been operating in bankruptcy protection since December 2002, has just deferred a $72 million quarterly pension payment. It’s the latest in a row of troubles at the airline industry. Southwest’s CEO James Parker unexpectedly stepped down last week from what he calls a “draining” job. Part of the reason is a grueling two-year-long talk with the airline’s flight attendant’s union

There is no immediate reaction from labor groups to United’s latest pension announcement. But it’s not hard to imagine how employees, especially elderly ones, feel about the news. How should airlines keep down costs while bolstering morale, which are both crucial to survive?FCS