United: So Many Cuts, So Little Relief

Employee ownership. It was going to remake United Airlines Inc., keeping it competitive with such feisty low-cost carriers as Southwest Airlines Co. To make the strategy work, employees took pay cuts averaging 15% shortly after the buyout was finalized last July. And as promised, the company launched its new low-fare shuttle in October. But one thing hasn't gone according to plan: The labor-cost cuts are being eaten up by hikes in other expenses. In mid-November, United executives warned analysts that costs are heading up again.

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