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Flight Attendants Concerned UAL BOD Complicit in Executive Corruption

Date: April 28, 2005

Inaction Violates BOD Fiduciary Responsibility to Ensure Successful Reorganization

CHICAGO - The United Airlines Board of Directors (UAL BOD) has failed to respond to an April 19 letter from the Association of Flight Attendants-CWA (AFA) which provides alarming details about the incompetent and dishonest actions of current executives.  The letter called for the "Board to take all necessary actions to establish a transition period whereby a new management team can be identified and installed as quickly as possible." The Union said the Board's lack of response raises a question of the Board's complicity in the alleged transgressions.

The letter from AFA detailed information for the Board members about senior management's actions to deliberately misrepresent and conceal material information from both AFA and the court regarding the annual $112 million Salaried and Management concessions allocated by management's own plan to achieve $725 million in additional cost savings to achieve exit financing.  Lack of action or response on the part of the UAL BOD gives way to even greater concern from the Union for the future of United Airlines.

"This Board has been the silent witness to 29 months of incompetent planning on the part of current management," said AFA United Master Executive Council President Greg Davidowitch.  "Failing to act on concrete evidence about the dishonest actions of current management leaves one to believe that the Board members are complicit in the corrupt dealings of these inept executives."

Since the Board has received the letter from the Union, current management has attempted to make an end run on the Flight Attendants' right to defend their pensions through the court process. Management brokered a sellout $1.5 billion deal with the Pension Benefit Guaranty Corporation to terminate all of the employee pension plans, injecting greater urgency for action on the Union's grave concerns for United Airlines.  "The Court has admonished management in the past that improved labor relations are essential to the reorganization. With management still in attack mode, the Board of Directors must step in to prevent a labor relations meltdown," said Davidowitch.

"The UAL Board of Directors seems to have lost sight of its fiduciary responsibility to foster the reorganization and long-term success of the airline.  Simply warming a seat in the Boardroom cannot be tolerated when the future of United Airlines is at stake and the current executives are inflicting what may be irreparable harm to the corporation at an alarming rate," Davidowitch continued.  "Flight Attendants call on the UAL BOD to prove our assumptions wrong and take up the work necessary to seek the immediate replacement of senior 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 http://www.unitedafa.org/.

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