Release #07.UAL7
December 7, 2007

United Pilots: UAL Shareholder Plan ‘Ludicrous’

CHICAGO—United Airlines, once again turning its back on its most valuable asset—the pilots and employees—has announced it is providing a $250 million dividend to shareholders to be paid in January 2008. It’s a plan the pilots of United Airlines call “ludicrous.”

“The battle lines have now been drawn,” said Captain Mark Bathurst, chairman of the United Master Executive Council. “During bankruptcy, United CEO Glenn Tilton and his management team needed the pilots and other employees for survival, and we answered the call. By its actions, this management team has abandoned any pretense of working in partnership with its employees to make United strong and profitable. Instead, this management team has screamed from the mountaintops that it no longer needs its pilots; that it doesn’t care what we think.

“Is this why the company tore up our contracts, and wiped out our pensions—so that Glenn Tilton and his management team can pay our cash to themselves and shareholders? And, if $90 oil is such a huge challenge for this company (and it is), why is it a ‘good thing’ to pay cash to shareholders but ‘ludicrous’ to pay the same cash to employees?” The Company said earlier that it would be “ludicrous” to increase their costs in an environment of $90 per barrel oil.

“Make no mistake about this: management long ago decided that they intended to make a substantial payment to shareholders—and, incidentally, themselves—come hell or high water, irrespective of industry trends and the company’s financial position, and irrespective of the views and interests of its employees,” said Captain Bathurst.

“Over the past several months, every stakeholder of the company has raised serious concerns about this course of action: United’s unions have questioned the fairness of rewarding shareholders without recognizing the employee sacrifices that enabled United to survive; United’s lenders have publicly questioned whether a dividend is fiscally prudent at a time of spiking fuel prices and a softening economy; and the company’s largest shareholders have stated that other long-term actions would create far more shareholder value than a modest dividend.

“Management has now decided to ignore all of these concerns and to pursue some undefined, short-term increase in its stock price directly at our expense and directly at the expense of the long-term health of our airline. At least we now know where we stand. Management has now told us that they will value their own interests and short-term shareholder returns over anything else—over stronger employee motivation and engagement, over a better customer experience, over the long-term health of the company.

“In every venue available to us, we have voiced the pilots’ concerns and our opposition to any ‘shareholder initiative’ that does not equally recognize the sacrifices of the pilots and other employees. At every opportunity, we have warned management that this is the wrong thing to do—wrong for the business, wrong for its employees and ultimately wrong for its lenders. Nothing we submit could be more ludicrous than this latest action undertaken by United management.”

Dave Kelly, 708/704-5648
Captain Steve Derebey, 253/279-8260