United Airlines Restructuring Plan Moves Forward

United Airlines clears two hurdles as it pursues its plan to emerge from bankruptcy next month. A judge rules that United can give its top executives big bonuses, despite union complaints. And the airline resolves a long-running battle with flight attendants over retirement plans.

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MICHELLE NORRIS, host:

This is ALL THINGS CONSIDERED from NPR News, I'm MICHELLE Norris.

MELISSA BLOCK host:

And I'm Melissa Block. United Airlines cleared two hurdles today as it pursues its plan to emerge from bankruptcy next month. A judge ruled that United can give its top executives big bonuses despite union complaints, and the airline resolved a long-running battle with flight attendants over retirement plans. NPR's Cheryl Corley reports.

CHERYL CORLEY reporting:

Inappropriate and excessive. That's how unions characterized the management stock plan that is part of United's overall reorganization, and they brought those arguments to bankruptcy court today. United has said all along that it needs the stock incentive to both retain and recruit talented managers, and Judge Eugene Wedoff agreed. Wedoff said the business culture may be overcompensating management but United operates in that environment and would suffer competitively if it did not offer such a plan. Sarah Nelson Dela Cruz is a spokeswoman for the United flight attendants.

Ms. SARAH NELSON DELA CRUZ (Spokeswoman, Association of Flight Attendants): End of the day, we're not satisfied with eight percent, but we can take some credit in knocking that down and decreasing the amount that these executives walk away with.

CORLEY: The Association of Flight Attendants had filed several lawsuits against United after the airline defaulted on its pension plans and shifted control to a government agency. But that long-standing feud is over. While United was still in the courtroom, Dela Cruz said the union has agreed to accept a 401-K plan to replace its lost pension, a plan which DELA CRUZ says is much better than United's original offer.

DELA CRUZ: Two-thirds of our members stood to lose over half of their pension benefits. What we have negotiated today is twice as good as that original proposal, and we believe it provides a secure foundation for the retirement security of our members.

CORLEY: Flight attendants will vote on the plan next month. Hearings for United's reorganization plan are scheduled for the rest of the week. Cheryl Corley, NPR News, Chicago.

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