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United’s Plan to Defer Pension Payments Demoralizes Flight Attendants

Date: July 23, 2004

Ladies and Gentlemen:

United Airlines announced in bankruptcy court today that they have secured debtor-in-possession (DIP) financing through the summer of 2005, but as part of the new terms of the financing, the company will not be making any payments to any employee pension plans through the term of the loan.

United’s actions today are devastating for the security of our pensions and the direction of our airline. While this is not a termination of the pension plans, the company’s actions make termination of the pension plans likely. Flight Attendants have continuously demonstrated our dedication to and support of this airline through massive sacrifices. We continue to do a great job of bringing the passengers back to our airline. Management’s deferral of pension payments is demoralizing to employee confidence, marginalizes employees’ future security and further burdens our Members, who have already sacrificed so much. Current management should explain to us why Flight Attendants should continue to support their reorganization efforts, if this is the best United can do for a life-time of service. Without a thoroughly committed workforce, the prospects for this management team successfully implementing its reorganization are severely jeopardized.

The company’s decision to defer payments has no immediate impact on any current or accrued pension benefit, but as active and retired Flight Attendants, we certainly have great cause for concern. Pension issues cross all ages and seniorities. During the 2003 Section 1113 process, which yielded $314 million dollars annually from Flight Attendants, we made pension changes resulting in $45 million in annual savings primarily affecting those at retirement age. Any future changes to our pensions would affect all Flight Attendants but especially those who will retire over the coming decades. Flight Attendants should not be forced to shoulder the responsibility of bailing out United after the decision of the Air Transportation Stabilization Board overseen by the anti-worker White House.

We remain fully engaged in the situation throughout these bankruptcy proceedings. AFA will continue to best represent Flight Attendant interests and ensure that we are proactively involved in any development that affects our jobs.

Throughout the past 20 months of bankruptcy, it has been the determination and incredible resilience of our flying partners that has allowed each of us to preserve our professionalism and make informed, rational decisions. Today is no different. Continue to practice vigilance in working together and gathering factual information from our website, 1-800-Dear-AFA, AFA E-lines, and your Local Council. Collectively we will determine our success as we face of our greatest challenges.

In Solidarity,

Greg Davidowitch, President
United Master Executive Council

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