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Published on 1/10/2005 in the Prospect News Distressed Debt Daily.

United reaches pacts with flight attendants, mechanics

By Jeff Pines

Washington, Jan. 10 - United Air Lines Inc. said it has reached tentative agreements with its flight attendants' union and its mechanics represented by the Aircraft Mechanics Fraternal Association.

Terms of the flight attendants' agreement have not been disclosed but it does not address any pension issues. The Association of Flight Attendants said it continues to oppose eliminating the pension plan.

United said it will work with the flight attendants' union over the next 90 days to try to resolve pension issues.

The AMFA said it will also discuss pensions with the airline over the next 90 days.

"Under the onerous realities of the bankruptcy process, flight attendants are faced with difficult decisions about our future," said Greg Davidowitch, president of AFA's United Master Executive Council, in a news release.

In a letter to his membership Davidowitch said negotiators were successful in keeping all of the membership's health and dental benefits.

The union's master executive council will meet Tuesday to vote on the agreement. If the council approves it, the terms of the agreement will be sent to the flight attendants to be reviewed and voted on.

The mechanics reached an agreement with United Friday. AMFA's membership will vote on the agreement within the seven to 10 days. The terms call for cutting pay, overtime pay and delaying some outsourcing that United wanted to commence immediately.

The union rejected the company's request to hike premiums for health and welfare benefits and to eliminate retiree life insurance.

The Chicago-based airline filed for bankruptcy on Dec. 9, 2002. Its Chapter 11 case number is 02-48191.


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