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UAL flight attendants object to bankruptcy plan

Flight attendants at United Airlines are asking a court to reject the No. 2 U.S. carrier's plan to exit bankruptcy protection, citing plans to pay bonuses to 400 members of management.
/ Source: Reuters

Flight attendants at United Airlines are asking a court to reject the No. 2 U.S. carrier's plan to exit bankruptcy protection, citing plans to pay bonuses to 400 members of management.

The union representing flight attendants at the UAL Corp. unit on Wednesday also objected to a part of the reorganization plan that allows the airline to void their labor contract once it does emerge from bankruptcy.

The Association of Flight Attendants spotlighted the objection -- initially filed Dec. 12 -- a week before a U.S. bankruptcy court in Chicago is set to begin a hearing that United hopes will confirm the reorganization plan.

That would pave the way for the Chicago-based carrier to end its bankruptcy after more than three years.

UAL infuriated its unions during its Chapter 11 case by slashing wages and benefits and terminating pension plans.

"Employees have been forced to sacrifice annually over $4 billion in pay, pensions, work rules and health care while executives have richly rewarded themselves," the AFA said in a statement.

The plan calls for management to be allocated 18.75 million shares, or 15 percent of the restructured United.

United has argued that the plan is in line with usual business practices that put a certain amount of managers' compensation at risk in the stock market.

"The management equity program is essential for United to retain and attract talented people whose skills are transferable outside of the airline industry," said airline spokeswoman Jean Medina.

"It's in everyone's interest to have this component of their compensation tied to the future performance of United's stock price."

The airline's creditors approved the reorganization plan late last month.