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Sep 272011
 
United Airlines Employee Pin

A 4-Diamond UA Employee Pin - Long service is no longer so valued at UA

United Airlines has broken its promise – indeed, what some believe to be not just a promise but a contractual commitment.

Now some of you are probably wondering what is news about this – it is far from the first time that an airline has reneged on its earlier promises/commitments – just think about all the changes to frequent flier programs, which – no matter how they are dressed up – are never to our advantage.  Or, for a more commonly broken promise, their promise to get us where we’re hoping to go, on time, and with our baggage accompanying us!

Usually when airlines break their promises, the people who are being disadvantaged have some recourse – they can choose to take their business elsewhere.  On the other hand, ‘conspiracy theorists’ would argue that the airlines have unofficially agreed to all be as bad as each other, so as to create ‘revolving door’ consumerism – customers who leave one airline, outraged at unfair treatment, are balanced by former customers of other airlines who similarly are outraged and move to other airlines.  It is like a game of musical chairs, except no-one ever removes any chairs, and the net result for the airlines as a group is nothing.

This is what the Department of Justice and the airlines assure us is fair full competition, of course.  If we don’t like Airline A, we are free to choose Airline B or C, which – oh my, what a coincidence – have the same policies, prices, and problems.

But, I’m distracting myself.  Back to the present broken promise.  This broken promise by United is a little different.  It affects a group of people who have absolutely totally no recourse whatsoever.  Its own retirees.  What are they to do?  What can they do?  Effectively nothing at all.

Okay – I hear you again.  Even this is far from new news – pension plan problems in the past have clearly shown us that nothing is guaranteed to us in the future, especially from an airline.

Nonetheless, this is a gratuitous bit of mean minded miserliness by United.  The airline has decided to re-jig its space available travel priorities, such that retirees now drop massively down the priority list in terms of who gets to fly in empty seats on planes.

In the past, lifetime travel benefits – which inched up the priority list based on the years of service an employee put in – were one of the really big deals that attracted people to the industry, and kept them in the industry, even when so much else was going bad around them.

But now United has decided that all active staff get higher boarding priorities than any retiree.  The retiree who had faithfully contributed to United for 30 years is now having to wait until even the freshest new hires have first taken their priority turn.

This switch is all the more meaningful due to cut-backs in service, and much higher load factors on planes.  Whereas in the past, a person flying space available might have had a choice of five flights to wherever they wished to go, and have been almost guaranteed a space on any of those five flights, nowadays it is more common to see maybe only four or three flights remaining and space available would-be travelers missing out on all of them, especially if they’re not at the top of what is sometimes almost 100 levels of priority.

It is hard to plan any sort of regular vacation with booked accommodation, touring, rental cars, etc, if you’re not sure within a day or two when you’ll actually get there, and if you’re also not sure how long it will take you to fly home again, either.

Now your tears may be fairly dry at learning about this.  A lifetime of flight benefits in return for a decade or two of service has always been an exceedingly generous transaction.  But that’s not the point.  The past arrangement was one which United fairly agreed to and accepted, and it was respected by all employees.  Those still working realized how the priority system worked, and if they planned to be longer term employees, they knew that as time passed, their own position on the priority list was gradually rising, and that position would be protected into the future.

But suddenly United has changed the rules.  Maybe it is a sensible business decision for the airline to make – adding greater benefits to new hires means it can get away with paying them less.  But it should have grandfathered in all current retirees and their travel priorities.

Interestingly, at least one former employee has been grandfathered in.  Former CEO Glenn Tilton’s travel benefits (which I’ll wager are positive space and first class, rather than space available and coach class) remain intact.

Retired flight attendants are now bringing a class action lawsuit against United.  Let’s wish them well.

More details here.

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  26 Responses to “United Airlines Breaks its Promise”

  1. Why is it airline employees (and spouses, parents, etc.) can get nearly free travel and the benefit can never be reduced or eliminated?

    With today’s unemployment, is this necessary to hire new employees? I had “free healthcare” for life back in the 80s (as did many). If that was continued, many companies would be broke if adhering to that “promise” today. Things change.

    • Because it was one of the enticements to leave earlier so UA could hire cheaper. And it doesn’t cost the airline anything because the svc charge is covers costs. The issue is boarding priority. After 34 years helping build the airline, and now being 1K flyer, maybe I should rethink my loyalty too

      • Thank you, Art, and I’m sure you can see the difference between the ‘new’ United Airlines and the proud employees (now retirees) of the old UAL.

  2. My comments relate only to United’s position with its retirees.

    I can accept how an employer can renegotiate its employment contract with its employees, just the same as employees do with their employer. At least in theory, there is equality in bargaining power in such cases. The employees can ‘take it or leave it’ in response to any employer offer/change, and can with their union (re)negotiate the contract with their employer.

    But retirees can not do that. They no longer have any bargaining power whatsoever. What was formerly a dynamic employment agreement now becomes a frozen in place fixed agreement between the former employer and the former employee.

    That is the only point I was making. As for the broader good sense of unlimited free travel benefits, either to current or past employees, I’m not stating an opinion on that point at all. 🙂

  3. I always felt my travel benefits were an EARNED retirement benefit. I think I EARNED this benefit after 39 years of dedicated service.

    United also tried to cancel my health insurance. It took weeks on my part and the part of my bank to get the insurance reinstated.

    • GARY; Thank you for your comment. I too earned my benefit after 38 years of service. We willing gave up pay raises in order to PURCHASE our guaranteed travel benefit. I have the annual earnings statement from UAL to prove that they in fact put a dollar mark on the travel benefit to show how it affected our annual income. It should have been grandfathered in for current retirees because we did earn it. Todays young/new employee has the advantage of knowing that NOTHING is guaranteed for his/her future senior years. We were not given that consideration in our loss of pension during UAL’s bankruptcy, along with 401k’s, the employee stock option plan, a corporate savings for Flight Attendants got confiscated, and medical premimums raised to unaffordable rates and now this one last benefit is ripped from under us without notice or an opportunity to express a plea to keep this one cost free benefit.

      • @KW. If you will read my first post I said that I could prove the benefit was in fact a guarantee of UAL FOR LIFE. We bypassed a certain percentage on pay increases to have this benefit. I bought and paid for that benefit! That is why we are suing to have this GUARANTEE honored. I also have contracts over the years and our boarding priority is and was negotiated. You should research something before making broad statements. This article, one in DEN post, a little tv blip in HNL are all baby steps but we will win our fight. We have lost everything else and had no way to fight it because its hard to fight bankruptcy’s legal shield. You seem young and possible a little like the “I WANT IT NOW” generation. Well you’ve got it now, a pay check and that is all. You would do yourself a good service to figure a way to secure your financial future instead of bemoaning your status for vacations. UAL has you on notice that when you retire from them , all you will get is BUHBYE! But time is on your side, you can focus on preparing for old age if you are smart, if not, street life is hard on the elderly.

  4. While the management and “above” is downgrading retirees’ benefits and/or trying to eliminate workers’ career benefits they, themselves, are often busy padding their “retirement” packages. Many of the CEO’s and above management status folk were and are short term employees.

    Selfishly discarding one’s elderly retirees in families, in societies and in corporations is unacceptable to many civilized people.

    The degradation of retirees by corporations can create a lack of respect that spreads to their frequent and infrequent customers.

    Georgia Nielsen, Retiree from United Airlines

  5. WHEN I HIRED ON IN 1964, I WAS LEAD TO BELIEVE THAT WHEN I RETIRED I WOULD GET POSITIVE SPACE UNLIMITED TRAVEL.

    THIS HAS CHANGED THRU THE YEARS FROM BAD TO WORSE, AND NOW THEY ARE TELLING ME THAT I ONLY GET 4 ROUND TRIP SPACE AVAILABLE TICKETS A YEAR. THATS LESS THAN WHEN I HIRED ON AND ONLY HAD ONE YEAR’S SENIORITY.

    I DON’T KNOW HOW MANY RETIREES WE HAVE OUT THERE BUT THE DIRECTION THE COMPANY IS GOING THEY ARE LOSING A LOT OF FREE MOUTH TO MOUTH ADVERTISING, IF YOU KNOW WHAT I MEAN.

  6. Did any of you sign a contract saying you’d get first priority boarding for life when you retire? No, you didn’t.

    I’m not defending either side but you weren’t promised anything, companies are allowed to change how they do things. Most of you have enjoyed the years where you actually could board a flight as standby. Now its impossible for active employees.

    United has to keep its current employees happy as well, and a lot of you didn’t put in a full career with United. You are now working at new jobs, and United is still letting you fly around free.

    Tell me how many other companies you would retain your benefits like you have with United?

    • @K.W. regarding your comment “Tell me how many other companies you would retain your benefits like you have with United?”

      The answer is: all companies that offered and awarded retirement benefits to their employees. There are lots of people, especially from government jobs (military, police, fire, prisons, state and municipal) as well as private industry who retired after 20 years or more and are drawing their benefits. Many of these people have gone onto second careers while enjoying their retirement benefits from their previous employers.

    • Every UAL employee entered into a contract with UAL when they were hired, written or not.

      That contract included many expectations of both parties. One clause stated that after 25 years and 50 years of age (later changed to 55, but not rescinded to earlier retirees who retired at 50), UAL would reward employee loyalty by giving unlimited, date-of-hire seniority passes and higher priority domestic passes.

      UAL used this benefit numerous times, most recently in 2009, to entice older, “senior” employees to leave: to trim the ranks, avoid layoffs, and when possible, hire new employees.

      United offered a benefit in exchange for employment, loyalty, and good service. That is a contract. So yes, every UAL retiree had a contract that included these benefits.

    • K.W.: I don’t know how you were raised, but I was raised with the understanding that a “deal” is a “deal” whether written into a formal contract, or given as a handbook stating “conditions of employment”. My “deal” with UAL was that after I worked for 25+ years, I got certain things guaranteed. This is no different than the contract signed by Jeff or any of the other officers except they have more high-priced lawyers. If the “Citizen” Corporation wants to negotiate a new contract with people that are just starting, that should not affect me, just as it would not affect Jeff.

  7. Well… the way I see it is when I worked the first 33 years with United all retirees were boarded before I was and now that I am a retiree well all employees are boarded before me, hmmm ah the cycle of life.

  8. I hired on with UAL in 1965……retired 2000….. and have learned at least one thing in that time. The (company) does not always have the employee’s best interest in mind much less the retiree. What the (company) giveth the (company) can and often does take away. Corporations are “people” without concience. Advice to those still employed……….Stay vigilant and to thy own self be true! Do not expect loyalty from the (company).

  9. I was a stewardess from 1966 until 2003. After I retired, I lost my pension, my 401K and the monthly primimum on the medical went so high that I had to drop it at age 65. My husband is a retired pilot and lost all the same planned income benefits as me accept he lost more. He lost his investment into a corporate ESOP and my flight attendant corporate savings acct. was confiscated by UAL in the bankruptcy. We have one last benefit that we earned and paid for during our years of service, that benefit was our ability to fly for pleasure by taking an unsold seat. This cost the company nothing! They prefer to allow a brand new active employee take the free seat instead of me. These youngsters have the opportunity to prepare for their financial future. They hired on knowing full well that UAL guarantees nothing at the end of a career, I did not have that forewarning, it got ripped from under me when I was already at an age of NO RETURN. Why would a company further denigrate me unless its a plan to somehow simply discard our seniors. We are fighting with what little resources we have and are grateful for any media coverage to let the general public know what UAL thinks of senior citizens.

    • Everyone !! As many of you I started in the 60’s worked to 2000 then retired thinking great I have a 401, I saved, I have great health Ins. for my husband and Myself, I will get a monthly check for the hard work I did.. Wrong.. UAL lied cheated and were thiefs.. They signed a CONTRACT with me at the end of my flying I was required to live up to the CONTRACT I signed with them but the scum didn’t..have to.. When you sign an agreement with a company (any) you are suppose to go by that.. But not UAL.. so many of us lost everything because of the lousy no good CEO’s, Board of directors and “company”… And now they took away the last piece of the contract.., the passes… Of course back when I flew The so called”company” said if you choose to live away from your base that is your choice.Now a new hire has as much senority as a person who worked their asses off for 35 yrs and dosen’t have to worry about getting to work because they choose to live far away from the base.. Does not make sense!! the so called “company hopes and prayed all retirees go away and die….New United not just same ole piece of shit!!

  10. Oh, poor K.W….stating that active employees cannot get on a flight now so for them this new travel plan letting the few retirees that may be listed for the same flight be left sitting at the gate is a good thing. Well, K.W., I don’t know how long you have been with the company but I have 21 years (was really looking forward to my 25 but not any longer) and when I started, I got bumped from plenty of flights trying to get anywhere SA. And in those days there were lots of flights, far more than you see today. Many active employees with more years than I got boarded first, it was the way it was done…you earned your place in the food chain with the years you put in. As my years of service accrued, so, too, did my higher place on the standby list. Standby travel is an enviable benefit for those not in the industry but I gave up making a better salary at other companies in order to be able to travel because UAL always paid less since SA travel was a big benefit. Higher boarding priority is what I was told I would have after 25 years and it is what I signed up for, what I was expecting in another few years and what I worked hard for after losing my ESOP shares, various pay raises, constant pay givebacks, no pension, and the hundred of untold sacrifices many of us had to make throught the years.

  11. Would be ok if the CEO had HIS bennies reduced. Not the case AGAIN I see.

    Looks like the beatings of the retired community, seniors, & the American worker will continue until morale improves….

  12. I do hope many of UAL’s senior citizen ‘Mileage Plus’ and 100K flyers read the above blog and the many replies by United Airlines retirees. Do you really think your ‘miles’ are safe? As you can see, ladies and gentlemen, NOTHING is safe at the ‘new United’. We retirees gave you gracious service…enough to make you return and fly with us again and again. Are younger employees doing a better job? I don’t think so. Please join us in our attempt to return empty seat boarding priority to United’s traditional ‘date of hire’. You can contact our new (and Continental’s former) CEO at jeff.smisek@ual.com.

  13. Ditto, hired in 1959, retired 1995, put in long hours, weekends, holidays, missed family time, odd hours, waiting for my turn as a BP6B, retiree, as payment for what I had done for all those years, but, not so much. My turn now, for those of you still there, your turn is probably coming. Don’t feel too comfortable with what you have today, it could well be taken from you tomorrow. A lot of empty promises, be forwarnedd!

  14. As a retiree of UAL since 2002 and giving over 40 yrs of my life for a promise that was broken be United and like others who gave up so much,so we when we all retired we with our family could enjoy what time we have left for thoes golden years.Now ,with UAL taking away most if not everything some of us must go back out into the work force to make end,s meet,my question is and will alway,s be why has the justice dept and FBI not looked into this matter? This matter should have been investated as one of the largest scams in U.S. history.For us to give-up some of our time of our life to keep UAL going then left behind and out in the cold is a crying shame.This retiree will not go down with out a fight

  15. Regarding the question — did any of you sign a contract saying that there would be lifetime boarding priority…..

    The early incentive package given to employees by united airliens stated upon returement that these benefits had been earned. This was used to entice people with high paying jobs to retire early. A beautiful brochure was given to these employees. There was no language that this specific benefit could change. As you all know there are Federal Guidelines on “disclaimers” that must be made, and these are not present in the documents given to tens of thousands of retirees. Interesting to note that this language is now present in current day early retirement incentive materials. — Thus, my view is that this is an implied contract. Implied contracts are supported by courts every day in this nation. This was a classic bait and switch situation, interestingly not too unlike the recent CIGNA case which went to the Supreme Court (CIGNA lost the case) Thank you for your time — Chris — Human Resources Vice President.

  16. I HAVE BEEN IN THE AIRLINE INDUSTRY FOR CLOSE TO 45 YEARS ( 20 YEARS WITH BRANIFF , 2 YEARS WITH CONTINENTAL AND 22 YEARS WITH UNITED . WITH THE BANKRUPTCY ( 3 TIMES ) OF BRANIFF , THE UNITED ESOP MESS ( ALL EMPLOYEES GAVE UP ALOT TO GET SHARES THAT ENDED UP BEING WORTH ZERO ) AND THEN THE UNITED BANKRUPTCY ( AGAIN SALARY CUT , VACATION CUT , CUT HERE CUT THERE & THEN PENISION IS GONE ) , I HAD HOPED THAT IT MIGHT GET BETTER – I WAS WRONG . FOR OVER 40 YEARS OF SERVICE WITH 2 AIRLINES , MY PENSIONS ( NOW FEDERAL ) ARE APPROX 30% OF WHAT I SHOULD HAVE GOTTEN . BUT EVEN AFTER ALL OF THIS , I WAS STILL LOOKING FORWARD TO BEING ABLE TO TAKE MY KIDS AND THEIR KIDS , ON A TRIP OR 2 SOMETIME . I AM STILL WORKING WELL PAST MY RETIREMENT AGE , SO THAT I CAN STILL TAKE THEM . IF I RETIRE , I CAN ONLY LET ( 2 NAMED COMPANIONS ) , USE PASS TRAVEL . THAT MEANS I CAN LET MY SON AND HIS WIFE FLY , BUT THEY HAVE TO LEAVE THE KIDS BEHIND OR THE KIDS CAN TRAVEL BY THEMSELVES , BUT THEIR DAD AND MOM HAVE TO STAY AT HOME . *** UNITED DOES NOT CARE ABOUT RETIREES OR SOON TO BE RETIREES – HIRE SOME YOUNG KID AND HOPE TO GET 2 OR 3 YEARS OUT OF THEM / GET RID OF THEM AND DO THE SAME THING AGAIN . IF THEY COULD THEY WOULD GET SOME ROBOTS TO DO EVERYTHING AND THEN UNITED DOES NOT HAVE WORRY ABOUT RETIREES *** , SORRY FOR THE RAMBLING , BUT I AM SO SICK OF THESE NON-AIRLINE C.E.O.S , TRYING TO FIGURE OUT HOW THEY CAN SQUEEZE ANOTHER NICKLE OUT OF PRESENT AND PAST EMPLOYEES . HOPE THE E.E.O.C. COMES THRU FOR US .

  17. Now it’s June. United’s most valuable CUSTOMERS (aka ‘the overly entitled’) have had their Mileage Plus benefits pulled (law suit filed already), the City Council of Houston is suddenly being blamed for future layoffs (even though they announced the forthcoming layoffs months before the City Council decision), and the most valuable customers are fleeing the ship, heading to Delta or American.
    The retirees were this NEW United’s first victim. It would have been wise if people had paid attention and prepared. What they did to the retirees that have now done to Million Milers, Mileage Plus Elites, millions of passengers. EXCEPT, the CEO received a $14m bonus last year.
    It speaks for itself.

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