N79969
Topic Author
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UAL Gets Closer To Edge

Wed Dec 04, 2002 5:42 am


UA now owes $900 million instead of $375 million in the next two weeks. It violated one of the terms of the agreement that it reached with a German lender thus pushing up the due date from 2007 to now. I do not see a way out for UA.

http://www.thestreet.com/_yahoo/funds/ericgillin/10056849.html
 
JumboClassic
Posts: 314
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 5:59 am

I have the feeling that Ch.11 seems the only alternative, but UA is trying to get the ATSB loan first. Just like US Airways - their loan application was approved, and they went to court. Makes sense that even under Chapter 11, they will still benefit from the government approved loan while re-structuring. So all the efforts UA makes to get labor concessions are maybe just to get the loan, not to avoid bankruptcy.

Just my 2c.
JC
 
N79969
Topic Author
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 6:12 am

JC,

I think you are right. The problem for UA is that they would have been on thin-ice with the ATSB even if the mechanics had approved the concessions last week. Now UA's immediate debt-load has doubled to an amount that is roughy equal to 50% of the sought after loan guarantee.

There is definitely a political dimension to UA's application as well. If the mechanics come around on Thursday and vote for concessions this time, the pressure will be on the Bush Administration. If UA's application is rejected, they will be blamed for the collapse for the country's 2nd largest carrier with all the problem that brings. If UA's application is approved, the Bush Administration will be accused of favoring large carriers over small ones. Vanguard and some others were rejected.

 
UNITED777ORD
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 9:44 am

ARE THE MECHANICS GONNA LET UAL DOWN?? THAT IS THE QUESTION..
 
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EA CO AS
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 10:37 am

While many of UA's fine mechanics know the score and are willing to do what it takes to make their company succeed, 57% of them proved my ex-EA parents right when they said the following:

"Never underestimate a ticked-off mechanic's ability to do the wrong thing in a labor dispute."

I'm PLEADING to all UAL mechanics out there...don't let your pride send this fine carrier into bankruptcy. We all know you didn't get it into this mess, but you can help to save it, and the tens of thousands of jobs it provides.

Vote yes on Thursday.

Even if you can't or won't live with the pay cuts, vote yes anyway. You can look for a new job while holding your old one and preserving the jobs of your co-workers.

Best of luck to all UA employees.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
Hole_Courtney
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 11:16 am

"I'm PLEADING to all UAL mechanics out there...don't let your pride send this fine carrier into bankruptcy"

-They're trying to protect their jobs in the best way that they can. What is best for the company is not always best for the workers. Not that I know the specifics, but it's a point none-the-less.

"Even if you can't or won't live with the pay cuts, vote yes anyway. You can look for a new job while holding your old one and preserving the jobs of your co-workers."

-No they can't do that. That's what a Union is; it guarantees employment. Along with that agreement of employment, the employee has to honour the contract as well. That's why Unions go against the Employment at Will doctrine, because when you have a contract the employers right to fire you at will is lost, just as your ability to quit at will is lost in the contract as well. Basically, although the mechanics can go looking for jobs, they can't break their contract just as much as United is unable to nullify the contract.

live forever and stay beautiful,
hole_courtney
"[He] knew everything about literature, except how to enjoy it." - Yossarian, Catch 22
 
MD88Captain
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 12:06 pm

If UAL truly has $900,000,000.00 due in the next week or two the mechanics vote does not matter. Chapter 11 will be filed to protect what cash remains.
 
BR715-A1-30
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 12:10 pm

 Sad. I can't believe it, It is really happening. I don't know what to say. I do have one thing to say. "Thanks alot Jim Goodwin  Angry  Yeah sure" But I still don't know what to say. UAL is in BIG BIG Trouble.  Sad
Puhdiddle
 
Tbird
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 12:27 pm

Whether or not UAL's mechanics vote for the wage cuts UAL is headed for Chap 11. The ATSB decision is not pending on the mechanics vote, it's dependent on UAL coming up with a business plan that works and so for they haven't. The Mechanic's pay cuts are just one piece of the puzzle. As for Bush stepping in and bailing out UAL, it's not going to happen. He would be setting a precedent he cannot set. If he bails out one company 100 others will line up for the same bail out.

I would love to know what's going on behind the scenes regarding lobbying of the other carriers against UAL. I'm sure the large network carriers are lobbying the ATSB not to approve the loan. If UAL files Chap 7 almost overnight, the others carriers will see a huge jump in cash flow. We just have to wait and see.

Regards
Tom
 
MxCtrlr
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 1:01 pm

If there's one thing I've learned over the years, its that "The government won't let XYZ Airlines fail because of what it will do to the economy" argument is baseless. I'm certain that EAL personnel thought that in 1990 and I know that most of us folks at PA thought that in 1991. Alas, both carriers died within 12 months of each other and the economy, the industry, and life in general, continued unabated. Don't count on the government to do the right thing - 99 out of 100 times, they won't!

MxCtrlr  Smile/happy/getting dizzy
Freight Dogs Anonymous - O.O.T.S.K.  Smokin cool
DAMN! This SUCKS! I just had to go to the next higher age bracket in my profile! :-(
 
Guest

RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 1:07 pm

Actually, if the government approves United's loan application (which they most likely will if the mechanics vote yes on Thursday), the other airlines are out of luck, as the deadline has passed for airlines applying for loans from the ATSB.

I think people are blowing this thing way out of proportion. Yes I know United is in dire financial straits, but even if they end up filing for bankruptcy, it would be for Chapter 11, not Chapter 7, which is the "goodbye" bankruptcy that PanAm and Eastern filed for.

Supposedly, the reason why mechanics voted down the concession package was due to something about vacation days, not the actual money itself. The last vote was so close, I see no reason why it should be voted down again.

The rest of United's employees are PISSED at the mechanics for the vote. I talked to a United pilot earlier today that I know and trust, and he said that if they vote it down again, relations between mechanics and the rest of the employees basically will be a bloodbath. I agree with him; what are the mechanics trying to prove? OK they were pissed at management, but Wolf is gone, Goodwin is gone, Dutta is gone, all the bad'uns are gone. United has a new management at the helm, I think they should give Tilton and his people a chance, he seems like he really knows his stuff.

No sense worrying about what we (airliners.net) cannot control.

U N I T E D WILL STAND!!!
 
cloudy
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 2:01 pm

____
think people are blowing this thing way out of proportion. Yes I know United is in dire financial straits, but even if they end up filing for bankruptcy, it would be for Chapter 11, not Chapter 7, which is the "goodbye" bankruptcy that PanAm and Eastern filed for
_____

Eastern first filed chapter 11 and then was forced by its creditors, etc. to go chapter 7 because no one was willing to put up the cash to help them emerge from bankruptcy. It languished in C-11 for awhile as Lorenzo, labor, and creditors all duked it out. Meanwhile the airline colapsed for lack of funds.

The same thing is very likely to happen with United.

As has been discussed in other threads..those who are interested in provided some of this cash are not interested in a share of a new, healthy carrier. They are looking to sell some of United's most valuable assets and in so doing earn more than they put in. Even if you had "Angels" rather than "Vultures" providing debtor-in-possesion financing - you would need a heck of allot more of them than were needed to save Continental and America West. United is HUGE and it would take ALLOT of cash to bring it through C-11 substantially intact.

United is to big and has used to much of it's resources trying to survive without C-11. When they do file C-11, it will very likely mean eventual liquidation. There may still be a United in four or five years. Someone will at least buy the operator's certificate and start a new airline - a la Pan AM. But it will be no more than a shadow of what it once was......

It may be to late to fight this. The industry's best hope may be a more slow and organized liquidation that gives travelers and employees time to adjust. I'm afraid current efforts to save the airline will...

1. Not work.

2. Put pressure on relatively healthy competitors like Delta and Continental - who have chosen to let the deadline for loan guarantees pass.

3. Cost the taxpayers billions if United defaults on the loans.

4. May make the liquidation process allot less predictable. If United is going to go bust no matter what happens, trying to hard to save it may just make it go out with a big BANG rather than a whimper...as the world's largest airline suddenly ceases operations. This should be avoided at all costs.

In short...We need an "Airline Hospice" program. If United will die anyway...we should not try to fight it but only make the process of its dying less painfull for everybody involved.
 
N79969
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RE: UAL Gets Closer To Edge

Wed Dec 04, 2002 11:03 pm

My sense of things is that Tbird has got it right. The Bush Administration cannot bail out an airline just because they are big or important. Although United is logically playing this card in Washington.

I kind of also agree with Cloudy but sense his view is a little too pessimistic. I think United might be able to successfully reorganize through C-11. There might be some less predatory lenders out there but I really do not know.
 
JumboClassic
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 12:55 am

UAL might stand a chance to reorganize under Ch.11 IF they get the ATSB loan. Otherwise, I'm affraid, it won't be pretty...

JC
 
Alpha 1
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 1:00 am

-They're trying to protect their jobs in the best way that they can. What is best for the company is not always best for the workers..

You don't know the history of IAM mechanics, then. They DON'T CARE about the company, period. They were like that at EA, and they seemed to have not learned anything since. How are they protecting their jobs in the best way they can by hurtling the whole company in to bankruptcy, where they wll lose even MORE jobs and wages than they would have lost with this deal?

"Even if you can't or won't live with the pay cuts, vote yes anyway. You can look for a new job while holding your old one and preserving the jobs of your co-workers."

You're assuming they'll have jobs. This carrier is on the thinnest of ice right now, and what is better? To have a job with less pay, or no job at all? That's what it could come down to if serious restructuring at UA does not take place. And if you're in the unemployment line, you should have plenty of time to look for a new job then.
 
N79969
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 1:02 am

UA is looking into "DIP financing." I am not familiar with how that works. I am not sure whether it is an alternative to an ATSB backed loan or whether it is what the ATSB would be guaranteeing. Does anyone know more about this kind of finance?

 
FlyPNS1
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 1:19 am

The DIP financing would be needed if UAL goes into CH11 BK.

If UAL is able to secure the ATSB backing, they would then have 3.8 Billion in cash (1.8 Billion cash on hand + 2.0 Billion ATSB backed loan). In the short term, that would be enough money for UAL to pay off the EETC loans and the KfW loans, plus do more restructuring without filing CH11 BK.

Of course, if the restructuring doesn't go well or the economy continues to flounder, UAL could still be forced into CH11 further down the road.
 
N79969
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 1:32 am

That is really strange about IAM. This is sort of an academic question but what exactly do IAM members perceive as their "best interests"? If you have studied advanced economics or seen "A Beautiful Mind", the concept of Nash equilibrium would suggest that the mechanics would take into consideration the future of United along with their own individual situations. This rationality is strangely absent from the IAM's rank-and-files' thought process.
 
hmflyer
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 1:33 am

UAL only has $1.0B in cash right now. That is why things are at a critical stage. They wouldn't be so close to bankruptcy if the had $1.8B. Right now they have less cash than Continental, an airline 1/2 their size. That is why UAL is in trouble.
 
N79969
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 1:47 am

I have the same understanding as HMflyer. UA will have $1.9 billion in cash with a ATSB backed loan. They have $1 billion now, they owe $ 900 million within 10-14 days. That's how I arrived at my figure. They will have to go into Chapter 11 whether they get a loan or not.

I give credit to Tilton for trying so hard to avoid bankruptcy. I hope the unions appreciate what he is attempting to do in this siutation. Bankruptcy will wipe out their equity in the company. It would be far easier for him to declare bankruptcy and cut costs under the protection of the court but he has chosen the high road.
 
FDXmech
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 2:39 am

This potential bankruptcy has ramifications way beyond United's borders.
United, as financially sick as they presently are, have huge market share as opposed to PanAm or Branniff in their latter days. If United goes into chapter 11, they will have a major cost advantage over a healthier AA and Delta.

It obviously would benefit the entire industry if United didn't go ch.11 and precipitate a disasterous downward spiral price war that the industry can ill afford at this juncture. When CO went ch.11 back in 1990, the majors complained bitterly of the cost advantage this gave them. CO was not nearly the behemouth of present day United.
You're only as good as your last departure.
 
FDXmech
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 2:39 am

This potential bankruptcy has ramifications way beyond United's borders.
United, as financially sick as they presently are, have huge market share as opposed to PanAm or Branniff in their latter days. If United goes into chapter 11, they will have a major cost advantage over a healthier AA and Delta.

It obviously would benefit the entire industry if United didn't go ch.11 and precipitate a disasterous downward spiral price war that the industry can ill afford at this juncture. When CO went ch.11 back in 1990, the majors complained bitterly of the cost advantage this gave them. CO was not nearly the behemouth of present day United.
You're only as good as your last departure.
 
N79969
Topic Author
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 3:34 am

Here is an article that supports FDXMech's comment:

http://www.nytimes.com/2002/12/04/business/04EURO.html

The "No" vote was not only a protest against managment but apparently against union leadership also:

http://www.nytimes.com/2002/12/04/business/04LABO.html
 
LJ
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 4:05 am

I would love to know what's going on behind the scenes regarding lobbying of the other carriers against UAL. I'm sure the large network carriers are lobbying the ATSB not to approve the loan.

It's not a very big secret that AA, DL, CO and NW are lobbying extensively against the UA loan (they acknowledged this in public).

UAL only has $1.0B in cash right now. That is why things are at a critical stage. They wouldn't be so close to bankruptcy if the had $1.8B. Right now they have less cash than Continental, an airline 1/2 their size. That is why UAL is in trouble.

Moreover all cash currently is UAL's possesion is already committed. Given that after the $900 million some other (large) payments are due early next year.

This potential bankruptcy has ramifications way beyond United's borders.
United, as financially sick as they presently are, have huge market share as opposed to PanAm or Branniff in their latter days. If United goes into chapter 11, they will have a major cost advantage over a healthier AA and Delta.


According to one analyst (Ray Neidl I think) the doomsday scenario is Chapter 11 for UA and then dragging down the entire US aviation with it. Therefore I reckon that the other airlines hope for a Chapter 7 instead of Chapter 11.

BTW how big is the chance that UAL will get the loan if the US government knows that the chance of UAL entering Chapter 11 is present? Allthough Chapter 11 doesn't mean the end it may be beneficial for the creditors to apply for Chapter 7 as soon as UAL enters Chapter 11 as they know they get part of their money back from the US government. Result: the US government aka US taxpayer is taking up the bill.

UA is looking into "DIP financing." I am not familiar with how that works.
Is a special kind of financing whereby the investors receives a very high % plus the fact that they are preffered debtors meaning that in case of Chapter 7 they're the first ones to receive their money back. Sometimes the investor receives some sort of collateral, but that's not needed (BTW GE Capital s a very important player in the DIP financing arena)

 
BDRules
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 4:13 am

R there going to be any cheap flights on UA now then  Wink/being sarcastic

Joking apart. This is terrible. UA have always been a world leader and now they seem to be fading away which i hope doesnt happen
 
AA717driver
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 4:32 am

UAL is different from the previous Ch. 11's in that they still have quite a few very valuable assets. They haven't gotten to the point that they have burned the furnature like PAA and TWA. Now, does that make the creditors want to liquidate and take their money? Does it buy more time for UAL and make them burn assets?

79969--DIP financing is purely bankruptcy related. A company's assets are initially frozen when Ch. 11 is filed. The DIP financing is required to provide operating capital until the judge can start freeing up assets and cash. There is a problem because the entity providing DIP financing now jumps to the head of the line of creditors. Ahead of those loaning UAL money guaranteed by the ATSB you ask? I don't know. But if that's true, try finding anyone to loan you money if they know they will be down the list of creditors--AND, try talking the ATSB into guaranteeing loans that are iffy from the start.

It doesn't help that AWA is now on the verge of defaulting on their first payment of a ATSB guaranteed loan. The extra $500M penalty is icing on the s**t cake that UAL is faced with.TC
FL450, M.85
 
N79969
Topic Author
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 5:16 am

AA717Driver,

Thank you for the DIP info. I think the additional $500M they owe now is a whole new pinched loaf actually. Things could deteriorate very quickly at United. I don't see how they will have sustainable liquidity even in a bankruptcy. Unfortunately, I could see the unions keeping up the haggling even while the carrier is in C-11. How far from C-11 to C-7? I hope C-7 never happens to United.
 
N79969
Topic Author
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 6:10 am

Rationality is officially out the window:

http://biz.yahoo.com/ap/021204/united_mechanics_3.html
 
MD88Captain
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 6:24 am

For some different perspective on the coming UAL bankruptcy please refer to Michel Boyd's website for interesting perspective.

http://www.aviationplanning.com

He says many things that are directly opposite from the convention wisdom. He is sure UAL will bankrupt, but that it will NOT start a domino effect of bankruptcies in the aviation industry.
 
MD88Captain
Posts: 1224
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 6:35 am

Boyd really says some insightful things in the link I just posted. Here it is again, because I think it is REALLY good stuff:

http://www.aviationplanning.com

He makes some excellent observations on UAL's problems. Specifically I like/agree that most have come up the with the wrong idea that Chapter 11 will make UAL into a lean mean competitor. He thinks it will make UAL even weaker. He believes the competition will pounce and increasing RJs will not help. He believes the revenue side of the equation is the big problem and bankruptcy scares/and confuses the public further hurting revenues.

Read him for the full picture.
 
N79969
Topic Author
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 6:38 am

Great article...thank you.
 
9844
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RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 6:44 am

Rationality is officially out the window:

Paid to stay at home...9-p

Pay and Benefits: Pilots will receive pay subject to applicable longevity increases, at their applicable
hourly rate in effect on the date they receive the Surplus Reduction award.
Such pilots shall receive 60 hours of pay for each month of participation in
the program, and shall receive all accruals and benefits, except PDI for
each such month. Such pilots shall have no flying or availability
obligations in any month of participation in the program.




LETTER OF AGREEMENT

between

UNITED AIR LINES, INC.

and the

AIR LINE PILOTS

in the service of

UNITED AIR LINES, INC.

as represented by

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL



This Letter of Agreement is made and entered into in accordance with the provisions of Title II of the Railway
Labor Act as amended, by and between United Air Lines, Inc., (hereinafter referred to as “United” or the “Company” Big grin
and the Air Line Pilots in the service of United Air Lines, Inc., as represented by the Air Line Pilots Association,
International (hereinafter referred to as “ALPA” Big grin.



WHEREAS, in the aftermath of terrorist attacks on the U.S. on September 11, 2001, there has been a
substantial impact on the airline industry in much of the world, including United, and

WHEREAS, the resultant reduction in flying at United has created a surplus of pilots, and



WHEREAS, United management and ALPA have discussed a variety of mutually beneficial ways to reduce the
negative impact of this surplus, and



WHEREAS, those discussions have, to date, identified three programs to be made available for, on a voluntary
basis, United pilots commencing for the December 2001 flying month,



NOW THEREFORE BE IT RESOLVED, the undersigned parties do hereby agree as follows:



I. Special Voluntary Leave of Absence



Eligibility: Special Voluntary Leaves of Absence will be offered only to pilots who have not
been issued a notice of furlough.



Duration and Preferencing: Pilots must notify the Company of their intention to participate in this Special
Voluntary Leave Program at least 2 days prior to the December schedule
awards. When submitting their notification, the pilot must indicate the
duration of the leave requested (permitted leave duration will range from 3
months to 24 months in 3-month increments).



The Company reserves the right to determine the number of Special
Voluntary Leaves of Absence, if any, within each seat, fleet and domicile.
The Company will award leaves in seniority order within each seat, fleet,
domicile, and leave duration.



When a surplus no longer exists in a fleet, seat and domicile, the
Company will be permitted to cancel leaves to meet the need in that fleet,
seat and domicile in the following order: Volunteers will be solicited
among all pilots on leave in that fleet, seat and domicile. If there are an
insufficient number of volunteers, the Company will cancel the leaves of
the required number of pilots beginning with the pilots with the least
amount of time remaining on their leave in reverse seniority order in that
fleet, seat and domicile.



Cancellation: The Company may cancel a pilot’s Special Voluntary Leave of Absence with no
less than 21 days advance notice, but in any case no less than 5 days
prior to the closing of the monthly schedule preferencing process for the
following month.



A pilot may cancel a Special Voluntary Leave of Absence only with Company
concurrence.



Vacancy Awards and

Return to Work: A pilot awarded a Special Voluntary Leave of Absence will be subject to the
provisions of the Agreement regarding the awarding of vacancies,
displacements and furloughs and the following provisions shall apply:



a. The Company may cancel a Special Voluntary Leave of
Absence prior to the scheduled completion date when a
pilot bids and is awarded a vacancy in a new fleet and/or
seat.

b. If a pilot bids and is awarded a vacancy in a new fleet
and/or seat, he will be scheduled for training in
accordance with the Agreement and his Special Voluntary
Leave of Absence will terminate on the day before he
begins transition training.

c. If a pilot bids and is awarded a lateral vacancy bid, his
vacancy bid will be activated in accordance with the
Agreement and his Special Voluntary Leave of Absence
will terminate on the day before he is activated into the
lateral bid award.

d. If, at the scheduled completion of a Special Voluntary
Leave of Absence, a pilot returning from the leave will
require training, the Company may contact the pilot and,
with his concurrence, may cancel his Special Voluntary
Leave of Absence earlier than previously scheduled so
that he can begin training for his assignment.

e. If, while on a Special Voluntary Leave of Absence a pilot is
furloughed, the Company will terminate his Special
Voluntary Leave of Absence on the day before the effective
date of his furlough.



Travel Privileges: While on a Special Voluntary Leave of Absence, the pilot and his eligibles will
continue to have online travel privileges with United Airlines and on United
Express no less than such benefits are extended to other employees on
leaves of absence.

Employee Benefits: Company sponsored medical, dental, life insurance and PDI will be the same as
for an active employee.

Retirement: A pilot on Special Voluntary Leave of Absence will continue to receive participation
for A-Plan calculations for the entire duration of his leave. Any month of
reduced or zero earnings during the leave will be disregarded from final
average earnings calculations, but the final average earnings period will
remain at 36 months.



The Company will not make any B-Plan contributions during the term of this leave. A
pilot cannot take any B-Plan distributions during this leave unless the pilot
terminates his employment with United, is furloughed or qualifies for a hardship
withdrawal as defined by IRS rules and the B-Plan.

Seniority & Accruals: Time spent on Special Voluntary Leave of Absence will be treated the same as
that of an active pilot for purposes of seniority, longevity for pay, vacation
credit but not accrual, and A-Plan pension participation.



Vacation: A pilot on Special Voluntary Leave of Absence is entitled to participate in the annual
vacation bidding process; however, the pilot may not bid for and he will not
be awarded an annual or monthly vacation that would take place during
the period of the leave. If a pilot awarded a Special Voluntary Leave of
Absence has a current year vacation award scheduled during the leave
and the term of the leave does not run through the end of the current
vacation year, the pilot may cancel the assigned vacation. Should the pilot
choose not to cancel the assigned vacation, or should the term of the
leave run through the end of the vacation year, the Company will pay the
pilot for the vacation prior to the commencement of the leave.



A pilot returning from a Special Voluntary Leave of Absence may indicate a
preference to defer his remaining unused vacation into the following
vacation year under the provisions of Section 11-F. If a pilot returning from
a Special Voluntary Leave of Absence chooses not to defer his unused
vacation and the Company is unable to assign the vacation, the Company
will pay the pilot for the unused vacation in April of the current vacation
year.



All vacation paid out under the terms of this paragraph will be paid based
upon the minimum monthly guarantee on a pro rata daily basis.



Unemployment Compensation: The Company will not contest any award of state unemployment
compensation made to a pilot awarded a Special Voluntary Leave Of
Absence during the term of the leave.

Monthly Preferencing: A pilot who is awarded a Special Voluntary Leave of Absence under this program
may not bid for any monthly schedules during the period of the leave.



Sick Leave: A pilot who participates in this Special Voluntary Leave of Absence program shall
not be eligible to use any sick leave during the period of the leave, nor will
he accrue any sick leave during the term of the Special Voluntary Leave of
Absence.




II. Surplus Reduction Leading to Retirement



Eligibility: All pilots who are eligible to retire and eligible to commence monthly benefits under
the A- Plan on or before July 1, 2002, and who are currently holding
assignments in a fleet and status where surpluses are declared.



Election: A pilot must make his desire known to the Company by November 25, 2001. The
Company reserves the right to limit the number of Surplus Reduction
assignments within any fleet and seat. The Company will award such
Surplus Reduction assignments in seniority order within each fleet and
seat.



An election to participate in the Surplus Reduction Leading to Retirement
Program is irrevocable by the pilot on the 10th calendar day after the
Company’s receipt of the pilot’s election. A pilot may revoke his election
to retire prior to the tenth calendar day after the Company’s receipt of the
pilot’s election.



Duration: Participation in this Surplus Reduction Program will commence on January 1, 2002
and will continue until the pilot’s separation date on or before June 30,
2002.



Pay and Benefits: Pilots will receive pay subject to applicable longevity increases, at their applicable
hourly rate in effect on the date they receive the Surplus Reduction award.
Such pilots shall receive 60 hours of pay for each month of participation in
the program, and shall receive all accruals and benefits, except PDI for
each such month. Such pilots shall have no flying or availability
obligations in any month of participation in the program.



Sick Leave: A pilot who participates in this Program shall not be eligible to use any sick leave.



Retirement: A pilot receiving pay under this Surplus Reduction Program will continue to receive
participation for A-Plan calculations. For purposes of final average
earnings calculations, any month in which a pilot participates in this
Surplus Reduction Program will be disregarded and, if any of the
disregarded months would otherwise have been in the participant’s
36-month final earnings period, then his final earnings period will be
equal to 36 minus the number of disregarded months.



The A-Plan benefit of a pilot who retires under this Surplus Reduction program prior
to age 60 will be adjusted for early retirement.



Seniority: A pilot receiving pay under this Surplus Reduction Program will continue to accrue
seniority and longevity.



Inbound Time: A pilot with an ID that carries inbound time into the surplus reduction month shall
receive 60 hours of pay for the surplus reduction month. Notwithstanding
any trip trade restrictions, a pilot will, if possible, be allowed to trip trade
his inbound trip. If the pilot is unable to trade he may request and he may
be awarded ANP for the inbound trip. If, however the pilot is unable to trip
trade out of his inbound trip, and the Company is unable to grant the ANP
request, the Company will notify the pilot at least 24 hours (48 hours for
an international ID) prior to the departure of the ID that contains the
inbound flight(s) that he will be required to fly the ID. The pilot then will fly
the ID that contains the inbound flight(s) and he will be paid for the
inbound portion of the ID in addition to the 60 hours of pay. A pilot on
reserve will be unavailable for any inbound trip, unless, due to the needs
of the service, he is given an assignment that operates into the next
month. Under this circumstance, the reserve pilot will be paid for the
inbound portion of the ID in addition to the 60 hours of pay.



Active Pilot Status: A pilot receiving pay under this Surplus Reduction Program will be treated as an
active pilot for all purposes.




III. Surplus Reduction at Lesser Guarantee



Eligibility: All Pilots who are currently holding assignments in a fleet, status and domicile
where surpluses are declared are eligible for the month, except those
with scheduled vacation, transition training, required training
consolidation (transitional, initial or extended monitoring), or other leaves
of absence.



A pilot in his base or grace month who is awarded a Surplus Reduction Line will be
obligated to take his PC/PT and will be credited with vacation credit days
in accordance with Section 9-C-2-c.



Preferencing: The Company reserves the right to determine the number of surplus reduction
assignments, if any, within any fleet, seat and domicile. The Company
will post available surplus reduction assignments, and pilots will then be
able to bid on these assignments. Any surplus reduction assignments
that go unfilled will be cancelled.



Pay and Benefits: Pilots will receive pay at their applicable hourly rate in effect on the date that they
receive a Surplus Reduction award. Such pilots shall receive 60 hours of
pay for each month of participation in the program, and shall receive all
accruals and benefits for each such month. Such pilots shall have no
flying or availability obligations in any month of participation in the
program.



Sick Leave: A pilot awarded a Surplus Reduction assignment will not be eligible to use sick
leave during that month.



Inbound Time: A pilot with an ID that carries inbound time into the surplus reduction month shall
receive 60 hours of pay for the surplus reduction month. At the time the
pilot notifies the Company of his interest in the Surplus Reduction
program, he may request ANP for the trip pairing that contains the
inbound flight(s). If, however, the Company is unable to grant the ANP
request, the Company will notify the pilot at least 5 days prior to the
commencement of the ID that contains the inbound flight(s). The pilot will
then fly the ID that contains the inbound flight(s) and he will be paid for the
inbound portion of the ID in addition to the 60 hours of pay. A pilot on
reserve will be unavailable for any inbound trip into any month in which he
participates in this program, unless, due to the needs of the service, he is
given an assignment that operates into the next month. Under this
circumstance, the reserve pilot will be paid for the inbound portion of the
ID in addition to the 60 hours of pay.



Retirement: A pilot receiving pay under this Surplus Reduction Program will continue to receive
participation for A-Plan calculations. For purposes of final average
earnings calculations, any month in which a pilot participates in this
Surplus Reduction Program will be disregarded and, if any of the
disregarded months would otherwise have been in the participant’s
36-month final earnings period, his final earnings period will be equal to
36 minus the number of disregarded months.



Duration: The Company may post monthly surplus reduction assignments for a period of one
year from the date this letter is signed or until declared surpluses are
eliminated, whichever is longer.






This Letter of Agreement will take effect upon its execution and will remain in effect concurrent with the Agreement or
as otherwise provided herein.



IN WITNESS WHEREOF, the parties have signed this Letter of Agreement this day of 2001.







WITNESS: FOR UNITED AIR LINES, INC.

William P. Hobgood

Senior Vice President

People



WITNESS: FOR THE AIR LINES PILOTS IN THE SERVICE OF UNITED AIR LINES, INC.

Duane E. Woerth, President

Air Line Pilots Association, International



F. C. Dubinsky, Chairman

UAL-MEC

WHQCM Monday, October 21, 2002 14:57:09
for information on this website contact:x
 
N79969
Topic Author
Posts: 6605
Joined: Tue Jan 29, 2002 1:43 am

RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 6:49 am

Some of the pilots would have collected 80% of their pay to stay at home...ALPA did not buy. I think it is pretty clear that UA's managment made some critical mistakes but those guys are mostly gone and now the ball is in labor's court.

I think we are at one time or another put in bad situations not of our own making-- the test is how you deal with it...
 
MD88Captain
Posts: 1224
Joined: Wed Nov 14, 2001 9:50 am

RE: UAL Gets Closer To Edge

Thu Dec 05, 2002 6:59 am

9844. Are you sure rationality is out the window? Do you now the the agreement you posted (way too long BTW) costs more than the HUGE training costs required by sitting down aircraft. AT DAL it is commonly said that one position open on senior equipment (MD11,777,767-400 Captain) creates 11 pilots needing to go to training as everyone moves up. That's is costly because they come off the line for 5-7 weeks to train at company expense. Hotel costs. Per deim. Training personnel. Sim time. New Jeppessen books. New aircraft books. Lost productivity. It is INCREDIBLY expensive to retain a whole pilot group as everyone moves up in good time and moves back in bad times.

So maybe the above agreement SAVES UAL Millions in cash. Maybe it should be hailed as a WIN/WIN deal? Or at least a creative way to save some money.
I believe the whole reason for the agreement was to save training costs.

Just because somebody gets a perceived good deal doesn't mean that it is automatically a bad thing.

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