Negotiators and their advisors from each group of the
Union Coalition met with United management to discuss
concepts for participation in the yearly $2.4 Billion
labor savings in the United Airlines Restructuring Plan.
At this point, no details are available since talks are
conceptual in nature. As soon as practical, details will
be presented to you.
To get through the
reorganization, United had to line up financing to
provide it with cash on hand as it navigates the
process. Bankruptcy is an expensive endeavor, with legal
and bankruptcy consultants’ fees totaling in the
hundreds of millions of dollars when all is said and
done. The most important condition to us is that the
lenders are requiring the airline to reduce its costs by
about $2.4 billion annually. This is over and above the
reductions planned for in the Recovery Plan we were
working under outside of bankruptcy. Those cost
reductions must be secured by mid-February. Thus, things
will happen very fast.
Our negotiating committee
will work to minimize the cuts as much as possible
within the conditions set forth by the lenders. AFA will
work with management to ensure that the cuts we face are
targeted so that they have the least impact on our
quality of life. We are participating in these
discussions because we have a chance to shape the way
the cuts are applied. If we just walked away, management
would take its last offer to the bankruptcy court judge
and ask for the changes to be made to our Contract. Not
negotiating leaves all of the control in the hands of
management. We want to keep as much control over this
impossible situation as we can. In the end, you will get
a chance to vote on any agreement we reach.
U.S.
Trustee Ira Bodenstein officially named United AFA to a
position on the unsecured Creditors Committee. AFA, ALPA
and the IAM will all have representatives on the
committee. The role of the committee is to protect the
interests of unsecured creditors. The Committee will
monitor and receive information from United and the
court during the bankruptcy process. AFA competed for
this seat with quite a number of creditors that are
holding a great stake in United’s debt. It is quite an
accomplishment for labor to achieve three positions on
the committee, and a definite tribute to the work of AFA
and our MEC President Greg Davidowitch. The Creditors
Committee consists of 13 creditors. In addition, the
first formal action undertaken by the Committee was to
appoint the City of Chicago as a non-voting member. All
of the Members of the Committee have a vested interest
in the outcome of the bankruptcy, and so does the City
of Chicago. The Committee members are:
Pension Benefit Guaranty
Corporation
Association of Flight
Attendants
Air Line Pilots
Association
International Association of
Machinists
Bank of New York
Airbus North America
Holdings, Inc.
Pratt & Whitney
HSBC Bank
USA
US Bank National Association
R Squared
Investment, LDC
Deutsche Lufthansa AG
Goodrich
Corporation
Galileo International, Inc.
*City of
Chicago
United's labor teams met Thursday with representatives from the Unions to continue discussions that began Tuesday with the Union Coalition’s representatives and financial advisors.
At the meeting, Executive Vice-President-Strategy Doug Hacker presented an overview of the company's business plan long term and short term, what will be released today is the announcement that along with a leaner, more competitive mainline operation, the strategy team believes it's necessary to offer a low-cost, no frills product in markets dominated by leisure customers and low-cost competition.
Unlike the former United Shuttle, this product would operate as a “separate” airline with a cost structure that is fully competitive with low-cost carriers.
What does this mean for Flight Attendants? We expect we will be given that information shortly, because in the short-term, the company is working on very tight timeframes established by the lenders to reduce labor costs. Thursday’s NewsReal stated that they need to lower the labor costs to continue to receive the money United needs to operate during bankruptcy.
Q: Who is the administrator of the Flight
Attendant Pension Plan?
A: The (Pension) Plan
administrator is United Airlines.
Q: When I go
to the PBGC website how come United Airlines is not
listed as one of the Companies?
A: United is
not listed on the PBGC website because the PBGC has not
taken over our Pension Plan.
The PBGC takes
over a (DB) Plan only under a standard or
distress
termination, neither of which has occurred.
This information can also
be found in the Bankruptcy
Q & A.