This information is no longer current - it is for reference only. It is an archive review of events that took place during United Airline's Chapter 11 Bankruptcy from December 9, 2002 - February 1, 2006.
Agreement Q&As: August 9, 2003
1. Why is this agreement preferable to taking our chances in court with the judge?
It is always preferable to have a consensual agreement. Through these negotiations, we were able to have significant, positive impact on the size and the scope of the cuts to our Contract. We were also able to obtain significant financial returns for our concessions in the form of profit sharing, stock and incentive bonuses. None of this would have been possible if the court rejected our agreement. Management would then have been free to impose more severe cuts, unilaterally without our input. We carefully evaluated the risks and determined that it was in the best interests of the Flight Attendants to assert as much control as possible by taking full advantage of the negotiations process.
2. What happens if the Tentative Agreement is not ratified by the Membership?
The tentative agreement will then be part of the 1113(c) filing and a contract could be imposed on us.
3. 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, it will have the ability to seek cuts that are necessary to the reorganization. However, Glenn Tilton has said throughout the labor negotiations that the company wanted to do comprehensive cuts and attempt to fix the labor cost issue all at once. This is different from the approach at US Airways, where it became clear that the company would seek cuts in two phases. The only unknown is what might be necessary if, for example, traffic and revenue continue to deteriorate due to the Gulf War.
4. If United petitions the court for emergency relief through an 1113(e) motion, will those cuts be permanent or temporary?
The cuts would be temporary. If the company is in jeopardy of not meeting its DIP covenants because of further harm to the company through lost bookings due to events such as the Iraqi War, the company may ask for additional emergency pay cuts, for all employees, to ensure that our company is not forced to liquidate. This tentative agreement provides that the company would treat any such concessions as a loan if AFA and the company consensually agree to emergency relief, in lieu of an 1113(e) filing. The loan would be repaid from profits after the company emerges from Chapter 11. If we face this situation, and we do not come to a consensual agreement, the company would then file an 1113(e) motion, and we would no longer have the option of treating the concessions as a loan.
5. Why did we agree to a "Low Cost Operation."
The Company had tried to demand the right to set up an entirely new low-cost airline and had plans to send 30% of our flying – and our jobs – over there. This would have decimated our mainline operation and essentially created a new C-scale airline that would compete with us. We felt that it made much more sense to keep the low-cost operation as part of the mainline, similar to the way Shuttle by United was structured. The cost cuts in the tentative agreement are designed to allow the Company to compete effectively against Southwest, Jet Blue and the growing list of low-cost competitors.
6. Can I be forced to fly in the LCO?
Yes, you could be required to fly in the LCO. If the Company established a separate LCO subsidiary, there would be a 6-month bid freeze. Flight Attendants would be required to stay in the LCO – much like today’s current transfer policy for 6 months. The monthly maximum would be 95 hours with no quarter system. AFA and the Company would negotiate work rules and pay rates.
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7. Why are there changes to medical benefits and pension, when this was such an important issue to many Flight Attendants?
In order to reach our $314 million yearly allocation as part of the $2.56 billion dollars, the Company insisted that there should be a common health plan for all employees as well as a change to all retirement plans.
8. Why didn’t we change other areas of the agreement instead of taking cuts to our pension and benefits?
It was a non-negotiable part of the term sheet. Benefits carry a high cost to the Corporation. Additionally, in order to compensate for these costs, wages would have had to be cut drastically.
9. Do I need to retire before July 1, 2003 to preserve my pension?
No. What you have earned in your pension calculation is frozen, including the right to collect the accrued vested pension at age 50, and is available to you upon retirement.
10. How will the new pension formula be calculated and how will it effect my frozen pension calculation on June 30, 2003?
The formula going forward will be:
Final average pay = (highest consecutive 60 months average out of the last 120 months prior to retirement) X 1.48% X Years of participation (Max 35 yrs). There is a 3% reduction for each year under age 60. At time of retirement, both plans will be calculated and you will be paid the greater of the two plans.
11. How much time do I have to decide if I should retire under the current Flight Attendant retirement plan and retain the current medical payment plan?
You would have to retire by June 30, 2003 to retain the current pre-medicare retiree medical coverage at the current cost. July 1, 2003 and after, there will be an increase to the retiree medical coverage cost. Depending upon your age, other factors could affect you.
12. If I am now 51 years old, will I have to wait until 55 to retire?
No. If you are 50 years old or older by May 1, 2003, AFA negotiated a clause to allow Flight Attendants between the ages of 50-55 the ability to retire under this new tentative agreement, and still be eligible for the Retiree Medical and Life Insurance available under the new plan.
13. What changes were made to the Sick Leave provisions, including Occupational benefits?
There was no change to the Sick Leave provision. Flight Attendants will continue accrue sick leave up to 950 hours maximum at 5 hours per month. However, the separate occupational sick leave bank has been eliminated. After May 1, 2003, Flight Attendants on Occupational Leave will be required to use time from their regular sick leave bank. Sick leave payments will be reduced by any state disability benefits or Workman’s Compensation benefits.
14. Have there been any changes to the 7-year Medical Leave of Absence?
Yes. Effective May 1, 2003, the Medical Leave of Absence provisions will be reduced to 3 years, with benefits. Those on Medical Leave exceeding 3 years will receive a 180-day notice that their leave will be terminated. If the employee does not return to work, their employment will be terminated unless they are eligible to retire. If on leave for less than 3 years on the effective date, their leave will expire on the maximum 3 year period or 180 days following the effective date, whichever is longer.
15. How will I be taxed on my medical and dental co-payments?
Medical and Dental co-payments will be automatically deducted on a pre-tax basis, much like your 401(k) deductions.
16. If the TA is ratified, will we be able to increase our flexible spending allocation for 2003?
The flex spending did not change, therefore, it is not legally permissible to allow a second open enrollment for 2003.
17. Will we still be able to carry over our medical deductible from the last 3 months of the previous year?
No.
18. Will Flight Attendants on LOA’s and Furloughs be required to pay medical and dental premiums?
All Flight Attendants will now have to pay a portion of their medical coverage effective July 1. As a result of this change, all voluntary furloughs will have to be rebid.
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19. Is the 9% reduction in pay in addition to our current interim 9% reduction?
No, our current interim reduction is actually 8.16% off the book rate. The total reduction will be 9% (which is an increase of 0.84%) off the current book rate. This includes all premium pay and override factors, except night pay.
20. Are there increases in pay through the term of this contract?
Yes. Increases of 2% on May 1, 2007, May 1, 2008 and April 30, 2009.
21. Will we be allowed to fly unlimited hours through RDO’s?
No, however the monthly and quarterly maximums have been increased to 97/194/276.
22. Are there any other contractual changes that could result in additional income?
Flight Attendants will participate in an incentive and profit sharing program. All employees, including management, will participate in the incentive program each year beginning in 2004. All U. S. payroll employees, including all United Flight Attendants, will participate in a pre-tax profit sharing program beginning in 2005.
23. What is a Book Rate?
A book rate is the hourly rates of pay for your seniority in Section 5.A.1 & 2 of the Contract. Our current book rate includes the 2002 Wage Arbitration Award that was effective 4/1/02.
24. What is COLA?
COLA is an acronym for “Cost of Living Adjustment”. COLA will be eliminated in the agreement.
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25. Were there any changes to scope?
No.
26. Has the vacation accrual changed?
Yes. The only change effects Flight Attendants with more than 30 years of service. The maximum vacation accrual will be 44 days at 25 years of service.
27. How will I be paid for my vacation?
Starting June 1, 2003, Flight Attendants will no longer be paid for overlaps associated with vacation. Effective for the 2004 schedule year, vacation days will be paid at the rate of 2.8 hours per day (2:48 per day). Reserve vacation shall be paid at the daily reserve guarantee rate based on the number of days in the schedule month. In a 30-day month, the reserve rate is 3:57 per day, in a 31-day month, 3:45 per day. DAT (Day at a time) vacation will be paid at a rate of 2.8 hours per day versus the current book of 2.6 hours daily.
28. Does the Contract still provide for "downtown or downtown-like" hotels?
Yes, for scheduled layovers of 20 hours or more. There may be instances where it is more cost effective to schedule a downtown layover rather than an airport layover.
29. How does a preferential bidding system work?
Until the program is designed to accommodate our population, we don’t have specifics on how the program will work. Essentially, the most significant change is that instead of bidding on a line of flying, you will preference days off and specify trips. The Company does not currently have the automation to support this bidding system.
30. How will work positions be assigned since we will no longer bid them?
We will still retain the bidding of premium positions, F, B, C, D. Cabin work assignments for remaining positions will be determined by seniority during briefing.
31. Will we continue to get understaffing?
Understaffing will be paid based on the total number of Flight Attendants onboard regardless of cabin assignment. Staffing guidelines still apply.
32. Will there be unlimited allotments for trades with open flying?
We have increased the daily allocation to 4% and removed the cap of 70. The Company continues to explore opportunities to increase allotments, whenever possible, as required by the Contract.
33. Will there be unlimited RDO’s?
Yes.
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34. 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:
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Frankfurt: 00-800-1-332-7232
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Hong Kong: 001-800-1332-7232
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London: 008-001-3327-232
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Narita: 001-8001-3327-232
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Paris: 00-8001-332-7232
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Taipei: 0080-0133-27232
35. I may be furloughed. Should I bother to vote at all?
AFA is participating in this restructuring process to preserve as many Flight Attendant jobs as possible and limit the number of involuntary furloughs. This is a 6 year tentative agreement, and when you return to work you will be working under these conditions. Yes, your vote counts!
36. 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:
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State their intention in writing to Paul MacKinnon, AFA International Secretary/Treasurer
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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 – April 2003.
EXAMPLE: A Flight Attendant is on a Voluntary Furlough or any other kind of leave with an effective start date of 1/1/03. They have a dues obligation for the first three months of the LOA or voluntary furlough. This means they owe January, February and March dues. If they wish to be considered an eligible voter for a ballot being counted in April 2003, she/he must pay dues for the entire LOA period, including April (an additional 1 month=$39).
37. How may I pay my dues?
Dues may be paid in one of two ways:
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Online at www.afanet.org using
MasterCard or Visa.
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Payment by check or money order may be sent directly to the AFA International Office as follows:
Association of Flight Attendants
Membership Services
Mary Beth Ziegler
1275 K Street – Suite 500
Washington, DC 20005
If dues are mailed, they must be received in the International Office no later than noon on April 28, 2003 in order for a Member to be considered active for the vote.
38. 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 before noon on April 29, 2003. Members who have elected to be billed directly from the International Office may submit their dues to a Post Office Box in Baltimore. Those payments must be received no later than April 28, 2003 to be eligible to vote.
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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