A Third Bankruptcy Bonus Program Awarded to Unnamed Individuals

Date: January 6, 2006
Type: AFA Article

Excerpt from September 13, 2005 Dear AFA

money falling downManagement has filed for a third Key Employee Retention Program for more management bonuses.  This time management requests the court approve bonuses for nine unnamed individuals who would profit from the sale of MyPoints.  It seems that our wages, pensions and jobs have been sacrificed, not for the benefit of our airline, but rather to pay out millions of dollars in bonuses to nine undisclosed individuals.  AFA has filed an objection to this newest management bonus program and our objection has been joined by the International Association of Machinists and Aerospace Workers.  Arguing within the standards of the bankruptcy law, our objection rejects the idea that this program is based on “sound business judgment” and vigorously points out that the program is neither “fair nor reasonable”…

Excerpt from the September 16, 2005 AFA Industry Editorial

There’s been so much breaking news recently that it’s hard to know where to focus our attention.  The sensory overload jolts us from Iraq, to a missing teenager in Aruba, to a Supreme Court vacancy, to Hurricane Katrina, briefly back to Iraq, and the double bankruptcy filing by two more major U.S. airlines.  Through all of this media whiplash, our Union has stayed relentlessly centered not only on what United management is saying, but more importantly, on what they’re doing.  The current glut of news is a Godsend for Glenn Tilton and the insatiable mercenaries who surround him.  They assume they can fly under the radar, so to speak, and avoid detection as they continue to think of more ways to fatten their already swollen wallets. 

Tilton and company have asked the Bankruptcy Court for a blank-check approval of millions of dollars to be thrown at nine unidentified management employees in the form of retention bonuses.  They call it a “Key Employee Retention Program,” or KERP.  We call it “success sharing” on steroids!  AFA has filed an emphatic objection to this corporate gluttony with Judge Wedoff.  Yeah, it’s those damn Flight Attendants again, the rank-and-file equivalent of the West Nile virus at World Headquarters.  And they think all we do is watch ‘Oprah’ and read ‘People Magazine.’  Where the hell do we get off trying to screw up their re-organization party? 

When the company filed its post-bankruptcy business plan a few weeks ago, it estimated a 2006 operating profit of over $900 million, and profits of more than $1 billion in each of the four years after that.  At that rate, they’ll be making more money than ever.  Some industry observers consider those figures too optimistic given the uncertainty of oil prices.  But this begs the question:  How much is United actually paying for fuel?  Considering the multiple fare increases over the past few months and the hedging of our purchase prices, don’t be misled by the dramatic daily headlines about the per-barrel price of oil.

Excerpt from Dear AFA, September 20, 2005

Last Friday the Bankruptcy Court heard arguments from United for a third Key Employee Retention Program (KERP) -- this time for nine unnamed individuals who would profit from the sale of MyPoints.  Over the objections of AFA and the IAM, Judge Wedoff approved the KERP for additional management bonuses saying that it was in line with the legal requirements.

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