Why United Airlines Retirees Are Frustrated And Angry

A number of people reached out to us after reading our article about American Airlines and pointed out that other airlines had similar issues.

One of those people was Julia, a retired United Airlines employee.

“United Airlines has done exactly the same thing to its employees.” Julia said. “After 36 years I spent working for United they took a bankruptcy and simply told us to go home. Or…if we took early retirement they made promises to us regarding our future pass privileges and health insurance – ALL OF WHICH THEY HAVE RESCINDED DRASTICALLY !!!”

Image Credit
Image Credit

United Airlines – The ESOP Story

United Airlines ill fated experiment with ESOP began in 1995.

ESOP, for those who may not be familiar with the term, means employee ownership. United Airlines employees paid out a portion of their wages in return for part ownership of the airline.

“We lost all our ESOP money that had been taking from our paychecks for over 5 yrs…” Julia said, “It simply vanished.”

Although it showed promising signs at the beginning, by the time the year 2000 had rolled around, staff morale was dropping fast and employees had gone from being fully engaged with management and helping with the airline, to hindering it.

It should be pointed out that the flight attendants’ union was never pro the ESOP scheme.

It’s difficult to say with certainty exactly why the ESOP failed, but suffice to say both it’s implementation and planning appeared to miss the mark of successful ESOPs with other companies (e.g Southwest Airlines).

Cancelled Pension Agreements & Insurance Let Down

On May 11th, 2005 the largest pension plan default in US history occurred.

“Oh yes…” Julia continues. ” After United took their bankruptcy they dumped their retirement program so now we are paid by the PBGC, a government insurance program. We lost, in some cases, thousands of dollars a month in retirement pay because the PBGC doesn’t pay us what United’s Program was designed to pay us. Yet United had millions in their retirement bank at the time… they just turned it over to the PBGC.”

Bankruptcy court ruled that United Airlines could default their pension obligations and turn the management of pensions over to the Pension Benefit Guaranty Corporation.

The end result of this was the loss of thousands upon thousands of dollars for retirees.

It affected pension plans for:

  • Pilots
  • Flight Attendants
  • Mechanics
  • Ground Service Workers
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Image Credit

And then there were the issues regarding Health insurance.

“We were promised that we would only have to pay $16.00 a month for our health insurance FOR LIFE.” Julia continues, “I am now paying $124.00 a month.”

Free airline passes for retirees after 25 Years

The next thing Julia wanted to talk about was what happened with the flight standby agreement.

“From the time I started working for United Airlines,” Julia said, “36 years before they took their bankruptcy it was always written in regulations that if we retired with 25 years’ service to the company we would have free airline passes for the rest of our lives and priority boarding over current working employees. That was always the way it was… suddenly now that has all changed. We now pay for passes and come AFTER current employees,, making it nearly impossible to get on a flight standby. They now say… ‘Well, passes are a privilege not a benefit’.”

Here’s the thing…
The airline had promised employees free airline passes for life. Also the process was that retirees would have priority over existing employees.

In January of 2012 this policy changed and retirees started coming in after current employees.

“Really????? then why was it written in regulations for 40-50 years and always honored as such for all those years?” Julia questioned. “Why do you think we all stayed working here for 3 and 4 decades? We could have made a lot more money somewhere else in a different field. All the while the revolving door of CEOs have been robbing the company blind with gigantic golden parachutes, huge stock options and even bigger salaries.”

Retirees are understandably upset by this as it was the promise of perks like this that encouraged them to work through the tough times the airline experienced over the years.

United Airline CEOs

Newly appointed CEO, Oscar Munuz, replaced previous CEO Jeff Smisek who abruptly resigned on September 8, 2015 after investigations into corruption prompting an internal investigation.

“They just fired the last CEO because he was doing such things as: He put on a special flight [for a supplier] between where he worked and his home town so HE could commute by United Airlines to and from home.” Julia said. “He is also the one who changed the retirees’ pass benefits, among other grievances, yet when he got fired he got to keep his priority boarding passes and millions in severance pay.”

In many of these cases with large companies it appears that what was taken from employees in the past, through the hard times, is forgotten in the good times.

United Airlines Today

So what does Julia think of United Airlines now?

We are now in what can only be called golden times for airlines.

In October 2015 United airlines reported a third-quarter net income of $1.7 billion dollars.

“You know today..it is hard for me to say the name ‘United Airlines’ without getting physically sick to my tummy.” Julia said. “I had dinner the other night with 2 retired flight attendants and they feel the same way. The skim and graft and greed all got started back when Stephen Wolfe became President. He also bankrupted a couple of other airlines while he walked away personally with millions..yes plural..millions of dollars from the airlines.”

“I don’t know…its a wacky world out there today.” Julia said. “And only the CEO’s and presidents are benefiting, big time, off the backs of the workers and employees. It really is criminal! There was a lot of other crap that went on the last few years. I’m just thankful I got to work for the airline when it was a great place to work and the benefits were great and honored.”

Did you or do you work for United Airlines and want to share your story? Leave a comment.

We want your stories. We are always looking for cases of employees that are being unfairly treated by any company – Please share your story with us.

RateMyCompanyUSA.com works hard to protect the privacy of the employees we tell the stories of. As such, names are changed where necessary. Thank you for understanding.

Comments

Rob StGeorge

Co Founder of RateMyCompanyUSA.com

6 Comments

  1. United Airlines is also discriminatory to retirees by not giving a discount for being a non smoker. The discount is $48 a month which is considerate on a fixed income. In the latest offering to the mechanics the mention of the Tabacco wellness credit on page 31. This was in the brochure they mailed out. So I followed the direction because my wife and I are tabacco free. Guess what there was no tab on the computer screen. I then called the benefits service center. They informed me it is only offered to active employees. It did not indicate this in the brochure. I believe this is discrimination towards seniors which are retirees.

  2. I spent over thirty years at UAL for nothing but empty promises and watching CEO after CEO walk away with millions without question or clawback.

    Employees contributed thousands to the ESOP for years and the government restricted contributions to our other retirement plans such as 401k’s and IRA’s we were not allowed full contributions to our private plans because of the ESOP.
    So most of us that were saving for our retirements as we should have been doing were penalized by the government and then robbed by the company when they went bankrupt unnecessarily.
    No one in government decided to investigate all the assets they moved to South America at the time, and it was all under the pretext of 911 and the loss of the airplanes everyone was still in shock.

    Tilton was quoted as saying he didn’t have any love for the company or employees and GAVE THE COMPANY AWAY in a under the table deal with ConAir when they couldn’t get a deal with US Air.

    Tilton and Smisek then changed the computer systems from United’s polished software to the archaic system you have to deal with present day over booking over loading.

    Smisek in charge the incompetent leach, took the money and got fired because of a corruption and should have been put in jail.
    May I jog your memory with Bridge Gate, Chris Christie the special flights dubbed as the ‘chairmans flight’ thus canceled abruptly when people found out about that.
    You should take a look at the history of that segment it flew empty most of the time.

    Absolutely no justice, thousands of letters were sent to do nothing politicians about the loss of PROMISED benefits and they were ignored.

    Smisek and Tilton actually lied in a congressional hearing about how much the two companies needed to merge to survive and got away with it.

    ( https://www.c-span.org/video/?294092-1/proposed-unitedcontinental-merger)

    I bet they both laughed at those stupid Congressmen on the way home about that, I do.
    Mr. Congressman see what that has gotten you.
    Today people are talking about how much of a monopoly it is.

    So at this point I receive about one third of my promised retirement and I my seniority doesn’t count at all. I will have to work till I die. Bitter? angry? yes.
    Everyone working are trapped, after fifteen twenty years are you going to change jobs? or hope things get better. I doubt it will get any better.

    This is a story for American Greed

  3. So sad when you gave 1,000 %, so excited to be a United Employee. You shared a sense of PRIDE and it showed in how you treated passengers, as well as fellow employees. Even when United screwed it’s employees with so, so many broken promises we still maintained that PRIDE. Where does one go after serving numerous years, working toward what was promised to them upon retiring. Changing the rules when it was to late to start over at another company. ( unless you live to be 100 +)
    Shame on all those who had a part in the shady politics, judges being paid off, CEO’s with golden parachutes, upper management etc. One could only hope that every dog gets their payback.
    When my pension check arrives monthly that was adjusted to 1/3 of what I was originally promised I wonder how the scoundrels who stole from the honest hard working employees live with themselves?
    Glad I can always hold my head high and I am not one of them.
    Hope the heat in Hell is beyond uncomfortable. Burn Baby Burn

  4. Here’s one for you. I was a stewardess for UAL. Married a UAL 👩‍✈️ pilot. He retired. Died. My passes are now considered “surviving spouses” and at the bottom for boarding. I’m also locked out of the ID90 webpage for travel discounts! Not so great.

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