United Airlines re-thinks operations in Hawaii - Hawaii News Now - KGMB and KHNL

United Airlines re-thinks operations in Hawaii

HONOLULU (HawaiiNewsNow) -

United Airlines is re-evaluating the cost structure of its ground personnel at Lihue, Kahului and Kona airports, the company confirmed Wednesday.

"We are looking at competitive market rates to see whether we can continue to keep above-the-wing and below-the-wing work within United," said Christen David, director of UAL corporate communications, in a statement responding to an inquiry from Hawaii News Now.

Sherri Kawell, managing director for Line Stations Americas, met with Maui personnel Tuesday and Kona personnel Wednesday to discuss the review of the airline's cost structure.

"United currently pays the same labor rates in all markets, unlike our major competitors, whose rates at smaller stations are in line with local market rates," David said. "This difference in pay puts us at a competitive disadvantage and we must look for ways to ensure our cost structure is more in line with other airlines serving the markets."

In fare wars, where one carrier may be seeking to take market share from another, a lower cost structure allows an airline to lower fares, knowing that a competitor with higher costs cannot match the fare without losing money.

"We have not made any decisions about changing our current staffing approach in Kona, Kahului and Lihue, but we need to evaluate alternatives," David said.

United is cutting 95 jobs in Toronto, 84 in Vancouver and 61 in Calgary, the Canadian Press reports, and will outsource the work instead. This often means that roughly the same number of jobs will exist but at lower wages.

In Hawaii, where costs are high, a key question both for affected United workers and for their employers' financial analysts is whether outsourcing the work would save enough money to be worth the unintended side effects. Union relations are affected by few issues more deeply than outsourcing work.

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