Flight Attendants Expose Bankruptcy Abuse

AFA-CWA is using every opportunity to call attention to the devastating effects that airline bankruptcies are having on flight attendants and other airline workers, pointing out that employees are suffering while executives continue to be lavished with fat paychecks and big bonuses.

AFA-CWA President Pat Friend took that message to Capitol Hill, telling a House judiciary subcommittee that when companies enter bankruptcy "employees are the first to suffer the consequences as management demands drastic pay and benefit reductions."

"To add insult to injury, management then shops for potential investors, using its employees' reduced standard of living as a selling point in hopes of exiting bankruptcy with large sums of fresh capital," Friend said. "Can you imagine the anger and outrage that working Americans feel when their sacrifices bankroll bonuses and higher standards of living for a few executives?"

Testifying before the committee, Antoinette Muoneke, an AFA-CWA member and United flight attendant, described the hardships she and her daughter face as a result of United's abuse of the bankruptcy process.

Flight attendants "made painful concessions that affected our families, threatened our children's opportunities, decreased our opportunity to afford health care and destroyed retirement security," she said, while "a select few are lining their pockets with our sacrifices."

Muoneke summarized her financial situation for the committee: "Following United's bankruptcy, my hours away from home have increased by nearly 40 percent, but working 40 percent more doesn't even make up for my loss in pay. I cannot afford the good health care plan that we once had because the concessions forced by executives also included higher medical costs."

She's also lost more than 30 percent of her pension benefit, even with a new retirement plan that AFA-CWA won over United's objections. She said CEO Glenn Tilton preserved his $4.5 million pension "while he destroyed my future security."

AFA-CWA members are taking their message to lawmakers and the public at state capitals, airports and other venues. 

Recently, Northwest flight attendants handed out customer surveys outside Minneapolis-St. Paul International airport, telling customers that management "has repeatedly broken its promises to passengers and employees," said Kevin Griffin, AFA-CWA's Northwest Master Executive Council President.

As Northwest Airlines emerged from bankruptcy, top executives got bonuses ranging from $10 million to $26.6 million for CEO Doug Steenland. A new stock plan awarded 400 executives about $1 million each while flight attendants sacrificed 40 percent in pay and work rules and now are 20 percent more productive.

AFA-CWA successfully negotiated a $182 million equity claim to provide relief for flight attendants who suffered during the bankruptcy process. Each eligible flight attendant received about $14,500 in cash and 401(k) contributions.

Outside the United Airlines annual meeting, the first shareholder meeting since 2002, flight attendants and other airline employees challenged management over issues of excessive pay and short staffing.

During its years in bankruptcy, United cut more than $7 billion in costs, including workers' wages, pensions and benefits. But when United exited from bankruptcy protection last year, CEO Glenn Tilton got $39.7 million in compensation for 2006, an amount greater than the company's profit for that year.

"All we're trying to do is renegotiate to force executives to live up to the promise of shared reward," said Greg Davidowitch, president of AFA-CWA's United master executive council.