Agreement Questions and Answers

Process 

1. Why did we negotiate any changes to our Contract?

United management filed a Section1113(c) motion to abrogate our Contract. Under Section 1113(c), an attempt to reach a consensual agreement is required. Once United filed a Section 1113(c) motion in the Bankruptcy Court, the parties were required to meet and attempt to reach a consensual agreement. Barring an agreement between United and AFA, the Court will issue a ruling whether to reject our Contract and provide United with the ability to impose cuts to our Contract. We felt it was in the best interest of the Membership to reach a consensual agreement that could be ratified.

2. What is the process by which United can change the terms of the AFA-United Collective Bargaining Agreement?

Section 1113 of the Bankruptcy Code requires United to satisfy certain requirements – the changes the Company proposes are necessary to a successful reorganization, the changes are fair and equitable, and United has engaged in good faith negotiations to obtain those changes. If the Company does not reach a consensual agreement with AFA, the Court will determine if United has met the Section 1113 requirements and, if so, will give the Company authority to reject the CBA and to impose its last offer.

3. After United filed its Section 1113 motion, what were AFA’s objectives?

To minimize the impact of changes to our Collective Bargaining Agreement and to prevent the termination of our pension plan.

4. How has and will AFA achieve those objectives?

We identified all possible sources of leverage and established a strategy to best use that leverage.

5. What sources of leverage did AFA identify?

• The solidarity of our members – we demonstrated to the Company and the public that United’s Flight Attendants are willing to engage in CHAOS™ if a consensual agreement were not reached.

• The weaknesses in United’s case - we identified these weaknesses during the discovery process of the Section 1113 litigation. We did this by requiring United to answer written questions (interrogatories), show us relevant evidence (request to produce documents) and to interview Company witnesses (depositions).

• Circumstances unique to this case - the Company reached an agreement with ALPA, the pilots ratified that agreement and the Company then asked the Court to approve it. United viewed the ALPA agreement as a lynchpin to its reorganization efforts and as a means to terminate the other employees’ pension plans. In fact, if any other pension plan remained in place, ALPA had the right to terminate its agreement. On Friday, January 7, however, the Court denied United’s motion to approve the ALPA agreement. Without this piece in place we believe the Company became much more interested in reaching a consensual agreement with AFA.

6. How did AFA use this leverage?

We used it to achieve our two objectives: minimizing the impact of the changes to the CBA and preserving the Flight Attendants’ pension plan.

• First, based upon the confluence of events that culminated on Friday, January 7, we were particularly well positioned to lessen the potential blow of Section 1113. We believe that the Tentative Agreement we reached reflects the fact that we took full advantage of these unusual circumstances.

• Second, by reaching a Tentative Agreement the Court did not have to determine if United’s proposed changes were “necessary”, were “fair and equitable”, or whether United should have the right to terminate our CBA including the elimination of the provision that establishes the pension plan.

• Most importantly, we’ve kept our leverage intact and can use it again, if after 90 days, we have not reached an agreement with United on the pension issue and the Company moves to terminate our pension plan.

• At that time the Company would have to file under Section 1113 to remove the contract language establishing our pension plan and to terminate the plan under ERISA. In that case United would have to prove to the court that removal of the pension provision was not only “necessary” and “fair and equitable” but “essential” to its ability to successfully reorganize.

7. What happens if the Tentative Agreement is not ratified by the Membership?

United Airlines will ask the Bankruptcy Court to reject the current Flight Attendant Contract.

8. If this agreement is ratified, does United have the ability to petition the court for more concessions from our contract?

Until the company emerges from bankruptcy, the ability to seek cuts through the Section 1113 process will continue to be available. However, the company would have to show a legal necessity under the bankruptcy process.

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Pension

1. What is the process by which United can terminate the Flight Attendant Pension Plan?

• Termination involves a two step process: United must satisfy the requirements of both Section 1113 and ERISA. The Company cannot proceed with a pension plan termination under ERISA so long as the CBA provides that the Company will maintain a defined benefit plan.

• United’s Section 1113 includes the elimination of the section of our contract that establishes the defined benefit plan.

• The Court does not treat this proposal regarding the pension plan separately but considers it to be part of a single package of Section 1113 concessions.

• If the Company were to grant United Section 1113 relief including the right to remove the pension plan provision, United could then go forward with termination of the plan under ERISA.
• ERISA imposes upon United a higher standard to terminate a pension plan than does Section 1113 for rejecting or modifying a CBA. Under ERISA, Company must show that termination is essential to a successful exit or, in other words, but for termination of the pension plan it will not be able to exit from bankruptcy.

2. Will AFA continue to forcefully fight to preserve our Defined Benefit Pension Plan?

Yes.

3. Why not just negotiate to achieve a replacement pension plan that would work better for Flight Attendants?

Under the law, if a company terminates a pension plan, the company is prohibited from providing a pension benefit that provides as the level of benefit under the terminated plan.

4. Why didn’t we agree to terminate the Pension Plan and take fewer concessions?

United sought to terminate our Defined Benefit Pension Plan in addition to originally requiring $138 million in concessions through other Contractual Changes. In other words, our pension plan would not have provided us with any credit towards the concessions United is seeking.

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Compensation

1. Why did AFA increase the wage rate concession to 9.5%?

In an effort to maintain our work rules, benefits and pensions and meet the $131 million target required by United, increases to the pay-cut were needed. The MEC and Membership feedback made it overwhelming clear that preserving work rules and benefits and our Defined Benefit Pension Plan was paramount.

2. Why are the purser, language and LIP pay a 9.0% pay cut?

We have been consistent that we could not give United management one dime more than was necessary. An additional .5% cut was not necessary.

3. Why isn’t the agreement “snapping back” to current wage rates?

In order to provide for snap backs that bring us back to where we are today, we would have had to make a much larger pay cut.

4. What happened to the fuel clause?

In order to achieve a protection to restore wages should fuel prices decline, management demanded a clause to increase pay cuts if fuel prices increased. Additionally, United stated that profit sharing could provide for additional income if United makes a profit.

5. If I had my uniform cleaned before January 7, 2005, can I still get reimbursed?

Yes. Cleaning receipts dated prior to January 7, 2005 will be paid, if submitted within the appropriate time frame.

6. What happens to my short-term disability (STD) as of January 7, 2005?

STD would be discontinued as of January 7, 2005 and would be paid on a pro-rated basis prior to that date.

7. Could we have given back all of Success Sharing and kept our wage cut at a lower rate?

AFA proposed to give up 100% of Success Sharing. However, United management believes that Flight Attendant participation in the Success Sharing program is critical for the success of the program and they insisted we participate at a minimal level.

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Benefits 

1. Will my Medical/Dental benefits change?

There was no change to the Flight Attendant medical or dental plan benefits or Flight Attendant contribution payments as scheduled in our current Agreement.

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Electronic Communication

1. Will I be required to check E-notes as official notification from United?

Yes. During the evolving process of United communicating electronically, Flight Attendants will be required to check whatever current form of electronic communication is utilized and accessible by Flight Attendants.

2. When will I be required to check electronic communication?

Once the electronic communication program from United is fully implemented, you would be required to check for electronic communications while on duty, just as you do today.

3. Will I need to check my mailbox and electronic communication?

Yes. No change has been made to the requirement to check your mailbox. Once the electronic communication system is in place, you will be required to check both.

4. When will electronic communication be implemented and will United have enough computers and printers for every Flight Attendant?

Prior to implementation there will be a discussion between AFA and United to consider access issues which will include the need to increase the number of PCs / terminals or other necessary equipment available at each location.

5. Will there be training and tutorials on how to use approved electronic communication methods?

AFA Representatives will be meeting with management to ensure Flight Attendants are provided with all of the necessary information prior to implementation of electronic communications.

6. Will I be required to read e-mail on days off?

No. 

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Vacation 

1. Will I have to re-bid my 2005 vacation?

No. The vacations that will be taken in 2005 were accrued in 2004. However the 2.6 pay rate for lineholders will take effect January 7, 2005.

2. How is Appendix A – regarding Reserve Vacation pay a protection for Reserves?

Currently reserves are paid vacation pay based upon the availability days that fall within their vacation and today, Reserve Lines are constructed manually. Under a future PBS system, if Reserve Lines may be computer generated and vacation days will be paid at 2.6 hours per vacation day, not availability days. PBS systems are designed to “plug-in” known absences prior to bidding. Therefore, Reserves would not be able to place days of availability in the block of vacation for a computer generated line. The Letter of Understanding listed in Appendix A protects vacation pay for Reserves under a computer generated Reserve line award scenario.

3. Will there be any changes to vacation splits?

Yes. For Flight Attendants at the 12 day accrual level, vacation may be split into 2 vacation periods with a minimum of 6 days in each period. Flight Attendants with vacation accruals greater than 12 days must still have a minimum of 7 days in a vacation period. For those with 26 days or more, 3 splits are allowable.

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Hours of Service

1. Does the Tentative Agreement provide any way for me to make up my loss in pay?

Yes. We have provided an additional option for an increase in hours to 100/200/300 hours for the quarter.

2. How do I trigger the second option to 100/200/300 quarterly hours?

The additional option will be triggered in the same manner as we traditionally opt today; through trip trades, open flying, RDO. A Reserve who wishes to opt to 100/200/300 will be able to do so through a call to Crew Scheduling.

3. How could Reserves be affected by the second option?

During the third month of the quarter a Reserve who has taken advantage of the second option may be assigned to an ID up to 87 hours for the month or their quarterly maximum, as they are today.

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Job Protections

1. Does the Tentative Agreement result in any loss of jobs?

No. Our goal during negotiations was to protect work rules, benefits and pensions; and minimize any loss of Flight Attendant jobs.

2. Will there be any changes to the Voluntary Furlough Contractual provisions?

No. The Company proposal was completely unacceptable to AFA – furlough provisions remain unchanged.

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Sick Leave 

1. Will my Contractual sick leave change?

Flight Attendant monthly sick leave accrual will be reduced from 5 hours to 4 hours per month, but continue to be paid at 100%.

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Letters of Understanding

1. Why do the Letters of Understanding regarding an early-out, supplemental insurance, Section 9.F.7. and non-U.S. citizen VISA issues only provide for further discussion?

The four letters of understanding cover issues we could not, for one reason or another, reach agreement or conclusion on during the negotiations. For example, the Supplemental Insurance will be implemented once an vendor with the best plan is selected; the Early Out Program will be offered only if a cost-neutral plan can be developed.

2. Is AFA attempting to get green cards for every non-U.S. citizen?

AFA is not attempting to get Green Cards for every non-U.S. citizen. U.S. citizens on our seniority list who work overseas are protected when they lose their work VISAs through government action. Although the incidents are rare, we are attempting to protect those non-U.S. citizens on our seniority list who likewise lose their work permits or VISAs.

3. How likely is it that there will be an early out program?

The Early Out is not guaranteed, however, Jane Allen made a commitment to the Financial Review Committee during the bargaining sessions that every effort would be made to develop a program United’s financial department is analyzing this issue for further discussion with AFA.

We do not recommend that any Flight Attendant base his or her decision on whether to vote FOR this Tentative Agreement based upon the Letters of Understanding in Appendix G-H.

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Voting

1. If I do not vote, will it count as a FOR vote?

No. Only the votes cast by eligible voters will be counted. The ballot results will be determined by the majority of votes cast FOR or AGAINST amongst the total number of ballots cast.

2. How will I be able to vote?

You will be able to vote on the Internet through a link on our AFA website, www.unitedafa.org, or by telephone at 1-877-AFA-VOTE. If you are an International based Flight Attendant use the following toll free numbers from your domicile location:

Frankfurt: 00-800-1-332-7232
Hong Kong: 001-800-1332-7232
London: 008-001-3327-232
Narita: 001-010-8001-3327-232
Paris: 00-8001-332-7232

3. Am I eligible to vote if I am on furlough or LOA status?

All active AFA Members in Good Standing are considered eligible voters.  “Active” means paying dues.  The AFA Constitution and Bylaws provides that any Flight Attendant on an inactive status (voluntary furlough, leave of absence, etc.) may keep her/his AFA Membership active. In order to exercise this option, a Flight Attendant may choose to place herself/himself on a “Leave and Remain Active” status with AFA.  To take advantage of this status the Member must:

• State their intention in writing to Paul MacKinnon, AFA International Secretary/Treasurer
  Association of Flight Attendants-CWA
  501 Third Street, NW
  Washington , DC 20001-2797

• Meet AFA dues obligation of not only the first 90 days, but all dues through and including the month in which the ballot is counted – January 2005.

4. How may I pay my dues?

Dues may be paid in one of two ways:

• Online at www.afanet.org using Mastercard or Visa.
• Payment by check or money order may be sent directly to the AFA International Office as follows:
  
  Association of Flight Attendants-CWA
  Membership Services
  Mary Beth Ziegler
  501 Third Street, NW
  Washington , DC 20001-2797

5. May I vote if I am delinquent in my dues?

Members who have not paid their dues and are not on furlough or leave status are considered delinquent.  These Members will receive voting instructions. However, they will not be eligible to have their vote counted unless the delinquency and dues are paid in full.

If Members are delinquent and have not established billing or a payment plan, they may make payments using the Website, www.afanet.org, or directly to the Washington Office.

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