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United Airlines share price up, to outsource jobs as a cost-reducing measure

United Continental Holdings said on Monday that it was considering to outsource as many as 2 000 jobs across US airports as a part of a cost-cutting plan.

The Chicago-based company said that the move will affect around 28 airports, including Atlanta, Miami, St. Louis and West Palm Beach, and it will target workers involved in baggage handling, check-in and customer service.

United, the second biggest US carrier by traffic, said it had notified the workers and the International Association of Machinists union, which represents them.

Although, nothing has been decided, the company has engaged in talks with the union over retaining some employees.

The move is also in line with companys 2013 pledge to reduce costs by $2 billion each year. United announced on Friday it estimates that 2014 unit costs, excluding fuel, would go up 1.4% compared to an year earlier.

In 2013 United outsourced almost 500 jobs across nine airports, including six in the US and the rest in Canada. Additionally, the carrier turned to vendors at twelve US airports to replace around 635 workers. However, employees at three airports located in Hawaii agreed to adjustment in order to remain at their positions.

Rich Delaney, president of the IAM district that covers United employees, said the union will meet with the airline operator on Tuesday in order to find ways to cut costs in different airports to ensure that United would agree to keep some of its employees.

Mr. Delaney also said that any staffer that gets replaced would have the right to transfer elsewhere in the company, based on seniority, and United would cover their expenses.

Back in 2013 United inked an agreement with the union, according to which the company is obligated to protect jobs at 30 of its most popular airports, 92% union represented workers are involved in those facilities.

Under the deal, United is also bind to negotiations with the union in order to provide an option for its employees, working at smaller, outsourcing-targeted airports, to chooses whether to remain at their current positions with lower conditions.

United Continental Holdings Inc gained 0.89% on Monday and closed at $65.92 in New York. On Tuesday the stock climbed 2.55% to $67.60 at 14:45 GMT, marking a one-year increase of 50.90%. The company is valued at $24.33 billion.

According to the Financial Times, the 17 analysts offering 12-month price targets for United Continental Holdings Inc have a median target of $76.00, with a high estimate of $95.50 and a low estimate of $63.00. The median estimate represents a 15.29% increase from the last close price.

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