The deal is less lucrative than the labor group’s long held retirement plan that the carrier terminated during its restructuring (See Judge Affirms Ruling For United’s Pension Plan Termination ), Reuters reported. Members of the Association of Flight Attendants must still ratify Wednesday’s pact – a vote now set to take place in the next six weeks.
The Pension Benefit Guaranty Corp. has assumed the plan for current and retired flight attendants that had $1.4 billion in assets to pay $3.3 billion in promised benefits (See United, PBGC Hammer Out Plan Takeover Pact ). The government-run insurance program will only make up part of the shortfall.
United expects to emerge from three years of bankruptcy next month with lower labor costs, a new financing plan and a retooled fleet.