-----Original Message-----
From: retireenews-owner@unitedafa.org
[mailto:retireenews-owner@unitedafa.org]On Behalf Of Sara Dela Cruz
Sent: Friday, May 21, 2004 2:48 PM
To: retireenews@unitedafa.org
Subject: AFA Retiree E-News (May 20, 2004)

AFA Retiree E-News, Your E-mail Source for Union Information

Stop United Management from Filing Section 1114!

May 20, 2004

Association of Flight Attendants at United Airlines

IN THIS EDITION:
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1.  Section 1114 Update -  United to File 1114 Tomorrow
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1.  Section 1114 Update - United to File 1114 Tomorrow

United is expected to file a Section 1114 motion to slash retiree
medical benefits in bankruptcy court tomorrow, May 21, 2004.
Negotiations to reach a consensual agreement failed due to United's
intransigence.  The Coalition of the Authorized Representatives of
United's retirees including pilots, Flight Attendants, ground workers,
and salaried and management retirees wrote Glenn Tilton the following
letter:

May 19, 2004

Glenn Tilton, Chairman & CEO
United Airlines, Inc.
P.O. Box 66100
Chicago, Illinois 60666

Re: Section 1114

Dear Glenn:

The undersigned represent salaried and management and nearly all
unionized pre-July 1, 2003 retirees. This historic coalition has joined
together to forge a common and productive response to the Company's
request that retirees agree voluntarily to reduce their medical
benefits.

On Friday, May 21, United intends to file a motion requesting that the
Bankruptcy Court force the retirees to accept the Company's proposed
reductions in retiree medical benefits. Before the Company files its
motion, Section 1114 of the Bankruptcy Code requires the Company to
serve its proposed modifications on the authorized representatives,
provide information necessary to evaluate the proposal, and confer in
good faith with the representatives about its proposal. We believe the
Company has not met these requirements.

In March, the Company served its proposal, which sought cuts in benefits
and increases in contributions, which are excessive for a number of
reasons, including:

.   The modifications effectively result in cuts in
Company-sponsored income for the vast majority of retirees, which are
far deeper than those demanded of active employees under the Company's
restructuring.

.   Unlike any other stakeholder in United, the Company is demanding
that retirees make a sacrifice that is unlimited in time or amount.

.   The proposed cuts would survive and escalate far beyond the
duration of the business plan that underlies United's reorganization.

.   The retirees have no opportunity to share in the ultimate
success of United through renegotiation of their terms, or participation
in the existing gain-sharing and profit-sharing programs.

.   These demands are made of people on fixed pensions, who are
least able to bear the permanent, escalating burden that would be
imposed.

.   These retiree medical benefits are deferred compensation that
was promised to the retirees in return for a lifetime of productive
service to the Company.

.   Thousands of employees retired in the first half of 2003 in the
expectation that by doing so they would protect their retiree benefits.

As much as we believe that the Company's proposal is unreasonable and
inconsistent with Section 1114 standards, we, and the retirees we
represent, share everyone's desire that the Company succeed. The
retirees are willing to make a fair and equitable contribution to a
successful reorganization. In that spirit, we made good faith
counterproposals which addressed the Company's concerns:

.   Recognizing the framework of the Company's business plan, which
projects financial results through 2010, we offer substantial economic
concessions which total nearly $300 million over that period.

.   In each year of the Company's business plan, the economics of
our proposal match what the Company has told us is the most critical
financial criterion for obtaining exit financing.

.   The problem is not permanent, as the Company's cost for pre-July
1, 2003 retiree health insurance will shrink as that population shrinks.
Nonetheless, much of the value of our proposal is through changes which
last indefinitely beyond the term of the business plan.

.   Sacrifices offered by retirees under our proposal take into
account their ability to pay.

We had hoped that, in response to our sincere and constructive
counterproposals, the Company would confer in a good faith effort to
reach a consensual agreement. Instead, in response to each of our
proposals, the Company's negotiators repeatedly made fundamentally the
same proposal that had been made in March. Intransigence is not good
faith negotiations.

With the Company's self-imposed deadline for filing the Section 1114
motion fast approaching, only a fundamental change in the Company's
approach to these discussions will prevent destructive litigation that
will serve no one's interest. We are sure that you recognize that the
character of this Company will be defined for many years to come by its
conduct during this bankruptcy process, and in particular how it chooses
to treat its most vulnerable constituency. To that end, we urge you, as
the leader of the corporation, to seize this opportunity to reach
consensus with 35,000 retirees and thereby to demonstrate that the
Company's transformation is not simply financial, but extends to the
culture of this organization and the morale of its employees.

Considering these circumstances, we look forward to your immediate
response.

Very truly yours,

Charles F. McErlean, Jr.
Chairman, SAM Section
1114 Committee

Roger D. Hall
Chairman, Pilots Section
1114 Committee

Gregory Davidowitch
President, UAL-MEC
AFA-CWA

S.R. Canale
President & Directing General Chairman
IAM District Lodge 141

Mikel Alpers
President, PAFCA-UAL

David Durkin
President, TWU Local 540

***END***

AFA Retiree E-news is an e-mail news publication for retired United
Airlines Flight Attendants.

The AFA MEC Communication Committee produced this newsletter.