UAL Flight Attendants Agree to new Pension Program

January 18, 2006 ( - A deal struck Wednesday between United Airlines flight attendants and the bankrupt air carrier calls for an annual company cash contribution, $20 million in convertible notes, and immediate vesting for all employed flight attendants.

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.