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United Airlines Flight Attendants Propose Over $1 Billion in Cost Cuts

Date: February 26, 2003

CHICAGO -- United Airlines flight attendants, represented by the Association of Flight Attendants, AFL-CIO, presented management with a proposal on Feb. 26 that will save the airline over one billion dollars in flight attendant costs over the next six years, lowering flight attendant costs to a level that will enable United to compete head-to-head with Southwest and Continental Airlines.

"AFA is committed to ensuring that United Airlines successfully reorganizes," said AFA United Master Executive Council President Greg Davidowitch. "Our proposal provides flight attendant cost savings that enable the airline to achieve a durable cost structure that is directly competitive with lower cost carriers in terms of overall flight attendant costs."

The current flight attendant contract contains a compensation adjustment arbitration mechanism agreed to in 1997 that sets United’s flight attendant costs in line with the industry average. The new proposal includes wage cuts, work rule and scheduling modifications that enable the airline to operate even more efficiently. When combined with other cost saving measures implemented in bankruptcy, the flight attendants' proposal will allow the airline to successfully restructure. The AFA United MEC unanimously endorsed the flight attendants' Feb. 26 proposal.

"A cost structure that makes it possible for United to compete with the lower cost, low-fare carriers, while maintaining our premium product, would make United the leader in the industry once again," Davidowitch said. "Reorganizing by reviving failed strategies should not be our goal. Our goal should be to capitalize on our strengths to become the best, most cost efficient premium carrier in the world. Our proposal makes it possible for United to do that."

The flight attendant's proposal provides for an equitable share of the total savings target to be shouldered by the flight attendants; enables the airline to meet all covenants set forth by lenders; and gives the airline the durable cost structure needed for a successful restructuring. Productivity changes included in the proposal address United’s interest in long-term change and will provide financial benefits to the company into the future.

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 http://www.unitedafa.org/.

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