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United Airlines’ Lies to Employees Threaten Labor Peace at Crucial Time

Date: January 14, 2004

CHICAGO — The United Airlines Master Executive Council of the Association of Flight Attendants-CWA, AFL-CIO, passed a resolution late yesterday condemning United management for its plan to impose devastating cuts to retiree medical benefits through Section 1114 of the bankruptcy code, even as the company is returning to profitability. Text of the resolution follows this release.

United management enticed Flight Attendants to retire by agreeing that if they retired by July 1, 2003 their comprehensive medical benefits would be protected, while those retiring after July 1 would see their benefits cut and out-of-pocket costs raised. Over 2,500 Flight Attendants took the company at its word and retired before the July 1 deadline. United is now seeking to slash the medical benefits for those retirees by exploiting Section 1114 of the bankruptcy code. The cuts are not necessary for United’s successful reorganization.

“United management’s bait-and-switch tactics will hurt retired Flight Attendants on fixed incomes and we will fight that with every legal means necessary,” said AFA United MEC President Greg Davidowitch. “This is the kind of thing that destroys relations between workers and management and ultimately jeopardizes the stability of the airline at a very crucial period -- as a current employee, I have to wonder what else they lied to us about.”

United management recently filed an update to its earlier application to the Air Transportation Stabilization Board for a federal loan guarantee that it needs to secure financing for a successful exit from bankruptcy. The update includes labor and non-labor cost reductions and potential revenue enhancements that were achieved as a result of workers’ sacrifices through restructured contracts that cut wages, benefits, and work rules.

“The sacrifices of front-line employees and recent retirees are the reason for United’s ability to restructure and succeed in the long-term,” Davidowitch said. “Short-sighted, naïve actions that threaten the working relationship between management and labor will thrust us back to a time when lenders, analysts, the media, and the employees collectively expressed no confidence in United Airlines management.”

More than 46,000 flight attendants, including the 21,000 flight attendants at United, join together to form AFA, the world’s largest flight attendant union. AFA is part of the 700,000 member strong Communications Workers of America, AFL-CIO. Visit us at www.unitedafa.org.

AFA United Master Executive Council Resolution:

WHEREAS, United Airlines Management has informed the Association of Flight Attendants of its plans to impose devastating cuts to retiree medical benefits through Section 1114 of the bankruptcy code, even as the Company is returning to profitability; and,

WHEREAS, seeking to change retiree medical is not necessary for United’s successful reorganization, and it is especially abhorrent to take more from retired United Flight Attendants who cannot afford, on their limited fixed incomes, increases in their costs for medical benefits or reductions in those benefits; and

WHEREAS, in the history of United Airlines only 1600 Flight Attendants have retired and in the first six months of 2003 United Airlines senior management enticed over 2500 Flight Attendants into retiring with misleading promises of preserving the same retiree benefits the Company now proposes to slash; and,

WHEREAS, Flight Attendants retire from their Company, they do not retire from their Union; AFA will represent the retirees in the Section 1114 process;

THEREFORE BE IT RESOLVED, that the United Master Executive Council will take all actions necessary to:

a. defeat the Company’s attempt to impose upon retirees changes to health benefits that are in no way necessary and fair;

b. compel the Company to uphold the promise which underlies the decision of 2500 Flight Attendants to retire from United;

c. unite and mobilize all retired and active Flight Attendants in a grassroots campaign against United’s decision to pick the pockets of those who can least afford it;

d. enlist the support of all other constituencies, including the traveling public, members of Congress and retiree associations, so as to stop United from depriving retirees of benefits that are essential to their well-being;

e. oppose in the bankruptcy court and any other appropriate forum, United’s effort to force retirees to choose between paying for medical care and other basic necessities like food and rent.

THEREFORE BE IT FINALLY RESOLVED, that the United Flight Attendants, both active and retired who have built this Union and this Company, will stand together against these reprehensible actions that will undermine labor peace at United and jeopardize the Company’s efforts to successfully reorganize.

Carried Unanimously, 1/13/04

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