jhayes_1780

Slow day at the office......

But I was just reading one of those newsletters sent from our auditors. Anyway, one of the stories was about taxes on fringe benefits.

Anyway... question to the employees here. Are you taxed the value of pass/NRSA travel (outside the scope of work/commuting/NRPS)?

fastair

Your reality is fine. The thread isnt about your reality, rather UA's specifically, the AFA's. My GUESS is your reality (just a guess based on probability) isn't in the same league as ours. If it is, I do empathize with you. If it isn't, then framing the reality of the UA labor group here puts the statement into perspective. My point was just that. Nothing exists in a total vacuum. If you choose to throw "Be thankful you have a job, there are people without" lines out there, I point out that the majority of my coworkers of a decade ago can't be thankful they have a job. (I hope most have gotten new ones elsewhere)

Giving someone a reality based viewpoint gives them perspective, but isn't always there to elicit sympathy. I just hate when some people don't look at all of the factors and variables when posting comments that show little to no understanding of the situation that they are discussing.

The thread is about a "kick in the mouth". Given the information that I posted, a reasonable man could understand where the statement came from. A man without any perspective of where it came from might think that the statement is way off and completely over the top.

As an employee, no. We pay the taxes on tickets that UA pays to the govts (customs fees/immigration...,) in addition to a service charge that UA charges us. Now if we have a domestic partner, or an "enrolled friend" we do pay taxes as imputed income, but not for employees are dependents.

I believe the officers and their relatives on their travels do, as they have confirmed space that has a value and displaces revenue booking in advance. Well, let me correct that. I believe UA pays the taxes that their travel incurs for them, much like UA pays the taxes on most "fringe" perks such as country club, chauffeur...

I don't know if this is why, but how do you put a taxable value on an unsold good? For 99% of the employees on pleasure travel, the seats taken are "spoilage". They displace no revenue and are only given out as they are closing the door and have no remaining value to UA as they cannot be sold. Much like at a bakery, the stuff that would be thrown away at the end of the night, are the employees taxed on that food? This is only a theory though.

nnn

Generally not. See http://www.law.cornell.edu/uscode/26...2----000-.html and http://www.irs.gov/publications/p15b...link1000101845.

NRSA travel is generally treated as a no-cost additional service, which is a non-taxed fringe benefit.

I believe the airlines, etc. were able to work that into the tax code/rules.

jhayes_1780

Again, its been a slow day, so my mind is wandering.

I only bring the original question up as I have a bit of a conspiracy theory....

Usually content in these newsletters/pamphlets are drived from IRS rulings/opionions or bulletins. UA might have read up and deemed there is the potential to require 1099-ing employees on upgrades or premium travel because of the new upgrade co-pay?

Here is the text that nnn cites (which BTW is the same as the newsletter I had).
Now hear me out on this...... The new upgrade co-pay will involve some to shell out significant $$$ for an upgrade. Is it possible that the upgrade co-pay could be refered to as a "substantial additional cost" (as lost revenue counts toward that number)?

I am not debating wether it is right or wrong that employees should lose (or keep) upgrades, just posing a theory.

ryan182

Upgrade co-pays are only for mileage based upgrades, IIRC the number of miles redeemed for mileage upgrades was much lower than for other uses (ie free tickets) also I'd bet mileage upgrades as % of overall upgrades (e500, cr1,SWUs) is very small, thus one could argue there wouldn't be a significant cost incurred. That said I don't even think its applicable at all since NRSA involves no "lost revenue" to count since it comes after all other upgrades.

nnn

NRSA requires a seat to be open after all else. There is no lost revenue or profit (other than the de minimis costs of a possible meal, wear and tear on the seat, and the fuel required to carry the extra weight).

ordogg

You can thank former Rep. Dan Rostenkowski (predecessor to Mike Flanagan, Blago and Rahm Emmanuel as congreesman in the 5th Dist., Illinois). He was a friend of UA and father of 2 UA F/A's.

AAerSTL

Just read this on the Nov. 24th edition of Dear AFA on their website:
So apparently flying F is part of their work life? Wow. Talk about entitlement. UA employees can retain this 'work life' by:
1) Purchasing F tickets
2) Earning UA/CO elite status for upgrade privileges
3) Redeeming Mileage Plus miles for upgrades and awards


Another example of how the union will complain about anything the company does. What ever happened to 'Flying the friendly skies of United Airlines'? I don't think this a very customer 'friendly' approach.

http://www.unitedafa.org/news/dearafa/default.aspx

PABitz

The lost revenue clause means that in the company cannot give away a service when there are paying customers in line to purchase it with revenue (including reductions in non-cash liabilities) that would otherwise be earned by the company. The copay shouldn't matter -- it isn't about what the employee would have paid if (s)he weren't an employee.

OTOH, every time an employee is "done a favor" by a friend and sits up front despite customers queued for the upgrade using paid upgrade instruments, (s)he earns taxable compensation at the market value of the upgrade (albeit compensation that is unlikely to be reported).

aluminumdriver

That's kinda due to the union does not worrying about the customer when they are negotiating their contract. Do you worry about me or the cargo guy losing their pension when you buy a ticket? I'm sure some would be pleased as punch if we took another 10% paycut so you could have hot inflight meals again, but it's not going to happen, sorry.

Unions have one main purpose, to look out for their dues paying members. Whether that is pay, benefits, safety issues, whatever. We do think of the customer when we do our jobs, and even when we negotiate some sections of our contract, like max duty days for safety, layover hotels, CH 9, issues like those.

With United's rapid drawdown, a lot of time those who want to NRSA have been forced up into F due to the high economy loads. I think there is a fear with unlimited upgrades that there will be fewer seats overall for NRSA, which is a decrease in one of their benefits (I would say our, but personally I could give a whit since I rarely fly United NRSA when on vacation or commuting as we have fewer seats than our competitors using larger aircraft, so I fly them a lot more). It's not about entitlement (a word FTers should not use really, talk about kettle meeting pot), what the AFA is highlighting TO THEIR PEOPLE, not you since their message was not sent to you, is how once again management decided to reduce a benefit to them without any discussion or offer of substitute compensation in some way. How hard would it have been to say sorry, we are doing this to compete with our competitors, but we'll try to make it up with something else? I don't see it as employees "not seeing that paying customers make pay checks" as some have argued, although it is a convenient excuse many like to throw out on every negative employee thread.

Hope that makes some sense to you. I think the angst is more about the process and the folks making the decisions than actually losing the ability to sit in F more. We still have that chance, it will just be harder on some routes and times.

AD

evanderm

I'm sorry, I fail to comprehend the fear for a number of reasons:
- Doesn't the SA stand for Space Available, ergo it's all subject to availability anyway
- isn't it a good development if there are more fare paying passengers taking up seats
-unlimited upgrades may take space away from first but it's opening up space in economy plus

so unless passenger loads are going up, how are there fewer seats available for NRSA?

Yes, there may be capacity reductions on the routes but NRSA is a product of overcapacity anyway. Must United maintain this high-priced overcapacity to satisfy its employees? That's open to debate, it does show a certain duty of care towards employees, however, at what price should this come. Nobody will benefit from the airline going bankrupt (again)(though yes, it will hurt execs with insured incomes and golden parachutes less and front-line workers without these benefits more, that's not the issue). I still fail to see that the specific benefit is flying in first. As far as I see it the benefit is the right to fly subject to availability.

I do imagine staff feeling upset that this may no longer be as widely available as it used to be, however, I will restate that I don't see that a benefit has been taken away, the original benefit remains the same.

Goes2Oz

Give it a rest. This was a line taken out of context by a former UA FA. Jonny Jet showed uncommon poor taste in posting this.

FYI ... we do know who buys the tickets. We also know where the revenue goes as far as salaries and what others get as far as perks. Do ya think that the top execs will be flying in coach? I doubt it. Ergo, the percieved sour grapes from AFA about benefits and double standard.

It is no big deal to most of us. As far as those of us who commute or fly on days off, a seat is a seat is a seat. Sure FC is nice, but egads, not worth such negative thoughts. It is a way to get somewhere. Most of you are reading way more into this than need be. Seven pages of comment over such a silly issue?? Get real.

ricardobtg

If UA is anticipating that on most flights F class will be going out full due to upgrades, it is not unreasonable to expect higher overbooking factors in Y. Yes, an upgrade frees up a seat in Y, but as a perishable commodity, one would expect that UA would do its best to fill that seat with a paying customer and not a commuter.

evanderm

with fear of going o/t:
Overbooking occurs in Y anyway and op-ups are (usually) given on a status priority. I know revenue management is an exact science, but still isn't the airlines goal to have as high an occupancy as possible with the greatest revenue achievable. This being said doesn't UA already maximize its overbooking factors anyway. I mean there are any given number of seats on a plane and the airline does its best to fill every one of them with revenue paying fares, regardless of travel class.

The only added passenger gain that unlimited upgrades will lead to are people who chose to keep flying/start flying with united who would otherwise fly other airlines. Isn't that what this whole thing is about, marketing a product by enticing customers with benefits. That's why I say that unless equipment is down-scaled or more people start flying; unlimited upgrades shouldn't lead to fewer seats being available for NRSA pax which doesn't detract from the original benefit granted to employees.

So why must the union take this stance and demoralize its members by IMO unduly bashing their members' employer. Nobody has proven to me that the benefit is to fly FIRST.

weero

Isn't the increase in seats sold the very intention behind that cursed UDU scheme ?