Printed from the AFA UAL MEC Web Site at www.unitedafa.org

• Home
• 1114 Process
• Medical Agreement
• Ad Campaign
• Past Events
• Legislative Action
• MEC Communications
• Media Articles
• Press Releases
• Resources
• Contact Us

United, Labor Agree on Retiree Benefits

Denver Post

June 11, 2004

Authors: Greg Griffin
Source: www.denverpost.com

United Airlines reached an agreement with its labor unions on Thursday that would raise medical-benefit payments for 27,000 retirees and end life-insurance coverage for most of them.

The accord, if approved by a judge in Chicago, would resolve a contentious issue that has loomed over United's plans to emerge from Chapter 11 bankruptcy protection later this year.

United reached a similar agreement last month with the union representing nearly 7,400 retired mechanics. Together, the deals would save United $300 million through 2010.

The deal announced Thursday is "one more step" in United's recovery, said analyst Ray Neidl of Blaylock and Partners in New York. But he said larger issues remain, such as spiraling jet-fuel costs and uncertainty about United's chances to receive a $1.6 billion loan guarantee from the government.

The union accord would cover retired United pilots, flight attendants, customer-service representatives, ramp workers, engineers and flight-control technicians, many of whom live in Colorado. The airline, based in suburban Chicago, operates its second hub at Denver International Airport, where it employs 6,200 workers.

United had been expected to ask the court during a hearing today to impose its plan on retirees if no agreement was reached. The company had been seeking annual savings of $57 million, or up to $370 million through 2010.

"The agreements with all our retirees contribute to achieving the durable savings that we need while recognizing the concerns of retirees expressed by their representatives," United chief operating officer Pete McDonald said in a statement.

International Association of Machinists official Randy Canale said Thursday's deal "balances the company's need to remain competitive while acknowledging the fixed income of retirees."

The IAM represents United's ticket agents, customer-service representatives and ramp workers.

Specifics of the retiree agreement were not available Thursday. United said it will file the agreement with the U.S. Bankruptcy Court in Chicago on Monday.

United spokeswoman Jean Medina said the agreement requires retirees to contribute more to the cost of their medical benefits.

It also includes changes to medical coverage available to retirees and terminates limited life-insurance coverage for most of the 27,000 former United workers, Medina said.

Flight attendants currently pay monthly premiums of $10 to $65 for health benefits, according to the Association of Flight Attendants, or AFA.

The flight attendants battled United publicly over the issue earlier this year, claiming the company misled workers into retiring early last year by guaranteeing no changes in their benefits.

About 2,500 flight attendants, including 150 in Denver, took an early-retirement package offered by United.

Airline officials said they never made any promises to those retirees about their health benefits, a position supported by an independent examiner's report, issued through the bankruptcy court in March.

"I'm a big supporter of the AFA, so if this is an agreement they feel is in the best interests of me as a retiree, I'm willing to support that effort," said Pueblo resident Gail Rodosevich, 54, who accepted United's early- retirement offer nearly a year ago.

"Personally, I'm disappointed in United because I wouldn't have retired last year if I had known they would do this. I would have continued flying for another four years," she said.

AFA spokeswoman Dawn Deeks said the unions negotiated a better deal than what they would have gotten by fighting in court.

"What (United) originally wanted was different than what we negotiated," she said. The agreement "is significantly better."

Staff writer Greg Griffin can be reached at 303-820-1241 or ggriffin@denverpost.com.

top of page