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United Airlines Flight Attendants' Statement on ATSB Decision

Date: December 4, 2002

Air Stabilization Boards Decision Likely to Destabilize Industry

CHICAGO — Association of Flight Attendants, AFL-CIO, United Airlines Master Executive Council President Greg Davidowitch made this statement in response to the Air Transportation Stabilization Board's decision to not approve United's application for a federal loan guarantee:

“The employees of United Airlines have made significant, difficult concessions that will severely affect the quality of our lives in an effort to keep our airline out of bankruptcy. The savings and strategic initiatives provided to United by the United Airlines Union Coalition position the carrier to generate significantly more revenue, lower costs and become profitable again in the near future.

"Today's announcement by the ATSB inaccurately characterizes United's aggressive cost-cutting measures as insufficient. That's not just disappointing, it's irresponsible. And we call on the ATSB to reconsider United's application.

"Anyone in the airline industry who would applaud this decision is a fool. The likely effect of the denial of the loan guarantee is that capital markets will close not just to United, but to all of the major network carriers, who are also in serious financial trouble.

"If the denial of the loan guarantee forces United into bankruptcy reorganization, the impact will be felt across the industry and in communities throughout the country. As United goes through the bankruptcy process, renegotiates leases to below market rates, refinances credit at significantly lower levels, the assets the other major carriers have to offer potential creditors -- airplanes -- will lose significant value, further damaging their ability to access credit.

"If the decision stands, the Air Transportation Stabilization Board will have failed in its mandate to stabilize the airline industry. The ATSB might as well change its name to the Destabilization Board because that's what today's decision effectively does to the U.S. airline industry."

More than 50,000 Flight Attendants, including the 24,000 Flight Attendants at United, join together to form AFA, the world’s largest Flight Attendant union. Visit us at www.unitedafa.org.

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