United Airlines overview and operations

United Airlines and AMFA

The Aircraft Mechanics Fraternal Association, AMFA, is a craft oriented, independent aviation union, representing only airline technicians and related employees in the craft or class in accordance with the National Meditation Board Rules and their dictates (About pp). The union is committed to elevating the professional standards and improve wages, benefits, and working conditions of the members it represents (About pp).

Founded in 1962, AMFA did not represent any carrier until 1964 at Ozark Airlines, then later represented Pacific Airlines, Airlift International, Hughes Airwest, and Southern Airways (About pp). AMFA now represents technicians and related personnel at Independence Air, Mesaba Airlines, Alaska Airlines, ATA, Horizon Air, Independence Air, Northwest Airlines, Southwest Airlines, and United Airlines (About pp).

AMFA has never accepted concessions, give-backs, two-tier pay scales, or "B" rate mechanics, mainly because the local airline representatives, who are well-acquainted with their airline's problems, are at the bargaining table with the national officers (About pp). The goal of AMFA is to have all airline technicians and related employees under the AMFA umbrella (About pp). Dues are two times the base rate of pay, excluding differentials and premiums, for example, if base pay is $20 per hour, then monthly dues are $40 (About pp). AMFA is the most democratic union in the airline industry (About pp).

On June 01, 2005, it was reported that United Airlines' unions had agreed to contracts that will help the company move toward an exit from Chapter 11 Bankruptcy protection (Joyce pp). United Airlines has been operating under bankruptcy court protection since December 2002 (Joyce pp). Acting before a deadline imposed by the bankruptcy court, members of the Aircraft Mechanics Fraternal Association, AMFA, ratified a five-year contract that includes pay and benefit cuts, thus, saving United Airlines $96 million a year and avoiding a threatened strike (Joyce pp). The International Association of Machinists and Aerospace Workers also agreed in principle to a new contract (Joyce pp).

Months of difficult bargaining led to the agreements, and United Airlines' spokeswoman, Jean Medina, said, "These are two major steps for our restructuring ... is clearly evidence of union and the company stepping up to do the work" (Joyce pp).

Approximately 81% of the members of the Aircraft Mechanics Fraternal Association, which represents some 7,000 United Airlines mechanics and cleaners, voted 50% to 41% in favor of a 3.9% pay cut, along with other concessions (Joyce pp). O.V. Delle-Femine, the Aircraft Mechanics Fraternal Association's National Director, said, "It's a sad situation that we have to bear the brunt of mismanagement ... We had to accept it or let the judge do it. This was the lesser of two evils" (Joyce pp). The Aircraft Mechanics Fraternal Association had authorized a strike if the contract vote failed, however, the majority of workers believed that voting against the contract could bring United Airlines down and therefore, eliminate their jobs altogether (Joyce pp). Members of the mechanics union had voted down a tentative contract agreement in January 2005 by a 57% "no" vote (Joyce pp)

Part of the new contract includes a five percent defined-contribution pension plan that will replace the former defined-benefit pension plans (Joyce pp). Moreover, the members of the Aircraft Mechanics Fraternal Association will also receive $40 million in convertible notes upon United Airlines' exit from Chapter 11 Bankruptcy protection (Joyce pp).

Both the International Association of Machinists and Aerospace Workers and Aircraft Mechanics Fraternal Association have protested the elimination of their defined-benefit pension plans (Joyce pp). The plans were terminated at the request of United Airlines by the bankruptcy court and taken over by the Pension Benefit Guaranty Corporation, the United States agency that insures pensions (Joyce pp). According to Delle-Femine, the AMFA will file a lawsuit against the Pension Benefit Guaranty Corp. sometime this month, June 2005, over the termination of the plans (Joyce pp). Delle-Femine said that the union was in negotiations and the PNGA unilaterally limited negotiations with United Airlines, "They just ignored what we were doing and they wanted to save money at our expense" (Joyce pp).

Prior to the agreed concessions, United Airlines had already cut $2.5 billion in labor costs since it filed for bankruptcy (Joyce pp). It is now trying to get $725 million in additional pay and benefit cuts from its 62,000 employees (Joyce pp). Anthony Sabino, a law professor in the Tobin College of Business at St. John's University in New York, said, "I think United, once again, was on the precipice looking into the abyss and stepped back ... It was a real close call ... A strike would have been absolutely disastrous" (Walsh pp). United had already reached contract concessions with pilots and flight attendants and had tentative agreement with mechanics (Walsh pp).

United Airlines received approval from the bankruptcy court to hand over its underfunded pension plans to a federal agency that will insure less than 70% of the promised obligations (Walsh pp). This will save United Airlines an estimated $645 million in annual costs, however, workers and retirees will lose out on more than $3 billion in expected benefits (Walsh pp). The company