In This E-Line United to Cut Execs' Pay, Eliminate 44 Exec. Positions, Pilots' Jobs F/A TIME-LINE FOR FEBRUARY 2003 Deadline for Voluntary Furlough 3 (VF3) has been extended to December 11, 2002

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United to Cut Execs' Pay, Pilots' Jobs
Source: Associated Press 
Publication date: 2002-12-04


CHICAGO (AP) - United Airlines' labor and wage cuts are going all the way to the top. 

The company said Tuesday its top executives, including CEO Glenn Tilton, will take 11-percent pay cuts to help the company grapple with its financial woes. The plan, expected to save $60 million, also eliminates eight of 44 executive officer positions. 

United also announced plans to furlough 352 pilots over the next two months. The airline is seeking to decrease its flying schedule next year. 

Executives' merit raises for 2002 and incentive pay also have been canceled. 

"Our objective is to optimize the performance of the organization while reducing the airline's cost structure," Tilton said in a release. He is paid $950,000 a year. 

The head of the pilots' union, Paul Whiteford, called the layoffs "a disappointing and premature development." 

"Once the company is well on its way to recovery, our top priority will be to work at returning as many of our furloughed pilots to the skies as possible, making them a part of a revitalized United Airlines," Whiteford said in a statement. 

After the planned cuts, the airline's current 8,600 pilots will shrink an additional 4 percent. A total of about 9,000 employees will be laid off, including 1,196 pilots. The company has about 83,000 employees. 

The first wave of pilot layoffs comes Jan. 6, when 220 will be cut, the company said. That will be followed with another 132 pilots on Feb. 7. 

"This is a very difficult announcement to make because of the impact it will have on our employees and their families," said Steve Forte, United's senior vice president for flight operations. 

Meanwhile, Gov. George Ryan recommended state lawmakers consider lending the Illinois-based company $200 million. Ryan proposed selling bonds to cover the cost of the loan, if the airline's federal loan guarantees come through. 

"Basically, it's a show of support," Ryan said. 

Whether the airline files for bankruptcy court protection hinges on two decisions expected later this week. 

United mechanics vote Thursday on whether they will agree to 7-precent wage cuts. Mechanics last week denied a similar proposal, which company officials say is needed to preserve its $5.2 billion proposal to cut labor costs. 

United could learn any day the results of its application to the Air Transportation Stabilization Board for a federal $1.8 billion loan guarantee. The board is seeking steep cost cuts from United in exchange for government assistance. 

F/A TIME-LINE FOR FEBRUARY 2003

PRIMARY
OPEN 16 DEC/1800
CLOSE 22 DEC/1800

SAP
OPEN 23 DEC/1800 (PIT, PIW, PHL, PHW, BOS)
CLOSE 29 DEC/1800

OPEN 23 DEC/1800 (CLT, CLW, DCA, LGA)
CLOSE 30 DEC/1800

SECONDARY
OPEN 07 JAN/1800
CLOSE 12 JAN/1800

SECONDARY LINE
OVERPROJECTION
DROP
OPEN 14 JAN/1800

RESERVE
OPEN 17 JAN/1800
CLOSE 23 JAN/1800

VOLUNTARY FURLOUGH 3 (VF3)
(Voluntary Furlough Request Form is available here: http://www.afausairways.org/furlough/VolFurloughRequest3.htm)

As Sherry Hendry mentioned in her CBS message dated November 26, 2002, the Company will once again be offering a Voluntary Furlough Program to lessen the impact of employee involuntary furloughs by allowing more senior Flight Attendants to elect voluntary furlough in order to save the jobs of more junior employees. We will call this program Voluntary Furlough 3 or VF3. It is similar to the last Voluntary Furlough 2 Program (VF2).

A copy of the Voluntary Furlough 3 Agreement will be posted in your crew room once it is finalized. A copy of the Agreement will also be available shortly on theHub.

Application forms will be available in the crew rooms and on theHub. The form must be submitted to Inflight Administration in Crystal City. The deadline for Inflight Administration to receive the form is December 11, 2002. Please ensure you are using the correct updated form. It states "2003 Voluntary Furlough 3 (VF3) Program Request Form" on the top of it.

Here are some highlights of the Voluntary Furlough 3 Agreement:

Scheduled to commence January 7, 2003 
Duration choices of VF 3:
4.75 Months VF3 beginning Jan 7, 2003 and ending May 31, 2003
10.75 Months VF3 beginning Jan 7, 2003 and ending Dec 1, 2003
16.75 Months VF3 beginning Jan 7, 2003 and ending May 31, 2004 
22.75 Months VF3 beginning Jan 7, 2003 and ending Dec 1, 2004
28.75 Months VF3 beginning Jan 7, 2003 and ending May 31, 2005
34.75 Months VF3 beginning Jan 7, 2003 and ending Dec 1, 2005

-- Open to Flight Attendants who will not be involuntarily furloughed 
-- Must be in an "active" and "available" status at the beginning of voluntary furlough 
-- Unlimited on-line travel privileges for eligible family members, except for companion passes 
-- Continued current group health and welfare benefits for first 120 days of voluntary furlough 
-- Sick bank and vacation day(s) accrual for January 2003 only 
-- Continued seniority and longevity accrual 
-- May retire with benefits from a voluntary furlough status 
-- No entitlement to furlough pay if awarded a voluntary furlough 

Voluntary furlough Flight Attendants who have a balance of less than $5,000 in the US Airways, Inc. 401(k) Savings Plan, will be required to take a distribution of Plan funds. You may be able to defer payment of taxes if you roll your distribution over into another qualified vehicle such as an IRA. The Fidelity Service Center for US Airways will send distribution information to all Plan participants after January 7, 2003. You will receive similar distribution information if you have a balance of less than $5,000 in the ESOP. Fidelity will send information on the ESOP in April 2003. If you have an outstanding 401(k) loan, you will continue to be responsible for making timely loan payments in order to avoid loan default and associated tax penalties. Contact the Fidelity Service Center for US Airways at (800) 354-3412 to make necessary payment arrangements.

Those Flight Attendants who bid for a VF 2 and did not receive it must apply for a VF 3 to be considered.

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