01.21.05

You have reached the APFA Weekly Hotline. This is Tommie Hutto-Blake, APFA President. Today is Friday, January 21st.

Senior Management reported this week that the fourth quarter financial picture was unfortunately another record loss of $387 million, with a total loss for 2004 of $761 million. This financial report is certainly disappointing considering the sacrifices made and current hard work applied by the 80,000 employees of AA. However, considering the numbers posted by some of our major competitors in this industry plagued by record high fuel prices, over capacity, fare wars, bankruptcies, and the continued instability in our commercial aviation community, I remain cautiously optimistic about this collective journey of ours. There is no doubt we here at AA have another challenging year ahead of us.

Yesterday, I along with the other labor leaders on AA’s property met with Gerard Arpey, CEO, James Beer, CFO, and their senior staff for both an intense financial review of the corporation’s records and a strategy session concerning our attempts toward a collaborative approach with labor and management working together toward our mutual futures. The APFA membership knows that historically, the labor/management relationship on AA’s property has been one notorious for its conflictive styles. Today, the 3 labor unions on this property, APFA, the Allied Pilots Association, and the Transport Workers’ Union are attempting to enter a new era by very cautiously working with senior management as an equal business partner. Like any partnership – there will be conflict at times, but like a marriage – you cannot have one partner without the other.

Your APFA leadership will continue to keep you updated on this new process. We want our seat at this decision making table. We want the flight attendant interest to clearly be represented at the AA/AMR board table. And we want your input on this matter.

As reported in all of our forms of APFA communication – the SKYWORD, the APFA website, our weekly Hotlines, our APFA operation’s bulletin boards, and a recent APFA mass e-group mailing, the 2005 APFA Members’ Opinion Survey is presently available to all members in good standing. This opinion survey became available this week and will remain open for phase I of this collection of member’s input for approximately one month. I urge you to participate and ask you to urge your co-workers to do the same. The University of North Texas Survey Research Center is the controlling organization of this opinion poll. Please visit the APFA website and then link to the UNT website to complete this survey. This is your chance to “talk to us” and have your voice heard on a collective basis.

Another way to have your voice heard is participating in the upcoming APFA Base Elections. Currently at many of our bases there are candidates seeking your support for base office. These roles are very important for all of our futures. Our APFA Base Chairpeople are the Governing Body of our Union. They will be taking office on April 1, 2005 for a two year term of office. These Base Chairs are your decision makers and the policy makers of our Union. Again, I urge you to get involved.

And now please stay on the line for the remainder of this week’s APFA Hotline, recorded by our National Hotel Coordinator, Dane Townsend. . . Dane,

Thank you, Tommie. This is Dane Townsend, APFA Hotel Coordinator, with the rest of the APFA hotline.

As Tommie said, on January 18 the APFA Membership Opinion Survey became available online at the APFA website at www.www.apfa.org. The University of North Texas Survey Research Center (SRC), which is completely independent from APFA and American Airlines, is conducting this survey. The data collected will be analyzed by the SRC research staff and shared only with the APFA leadership. Individual answers will be kept completely confidential.

In 1992, APFA worked with SRC researchers to develop and conduct a comprehensive survey of the APFA membership. The information gained from that survey was vital to our success in 1993. That was 12 years ago and, as we know all too well, everything has changed since that time.APFA retained the SRC to periodically survey you in the months ahead to collect your input. Participating in the Opinion Survey is your opportunity to help shape the focus and the approach of APFA in 2005 and beyond. We want to know your current goals, concerns and suggestions and need your input as we formulate the position of APFA within the industry and in legislative actions.

To access the survey, simply go to the APFA website and click on the “Membership Opinion Survey 2005” icon in the upper left corner of the home page. That will take you to the “Members Only” login page where you need to enter your employee number and your password. If you have never logged onto this part of the APFA website before and don’t have a password, use the last four digits of your SS#. Once you log in you will be in the Survey site and directed to enter your employee number again. This time do so with no leading zeros. Then you must enter the last four digits of your Social Security number. If you happen to be one of the few members whose SS# we don’t have on file at APFA headquarters, you will not be able to login yet. The screen will read, “login failed” and “if you’re still having trouble logging in, click here.” Follow the directions you find there and you should be into the survey in short order.

Your APFA leadership urges you to take a few minutes to complete the online Survey and to encourage your co-workers to do so as well.

On Wednesday of this week, AMR reported a $387 million or $2.40 per share loss for the fourth quarter of 2004. Chairman and CEO Gerard Arpey blamed the loss on high fuel prices and a “tough revenue environment.” American said it would defer delivery of 54 of the 56 jets on order with Boeing that had been scheduled for delivery between 2005 and 2007. Fifteen jets are being dropped from the fleet and 18 regional jet orders for American Eagle have been cancelled. Arpey called the results “a disappointing end to a very difficult year,” and predicted that AMR would likely post additional losses in the January – March quarter. Although revenue rose 3.4 percent, to $4.54 billion from $4.39 billion a year ago, expenses jumped 6 percent. Arpey said these and expected next quarter losses mean that the carrier must continue to focus on cutting costs and raising revenue.

From the Contract Department: The MSP satellite base will open as a test beginning with the contractual month of February. MSP will be a satellite of the Chicago domestic base. Approximately 30 bid positions will be included on the Chicago domestic bidsheet. The trips will originate and terminate in MSP and will be designated by the letter ‘P’ prior to the sequence number on the bidsheet. Transportation to and from MSP will not be provided if you are awarded or pick-up a MSP sequence. Please do not bid or pick-up a MSP sequence unless you plan to fly it. The MSP flight attendants have worked very hard to establish this satellite base. They have created a network to cover the flying and any open time that should develop during the month. We wish them much success.

From the Scheduling Department: Apparently there is a rumor swirling around that APFA has agreed to give away 2?4?1 trip trading and that now every trade will be considered an Optional Exchange. This is absolutely untrue. The only time a trip that was not an OE would become coded as one is when a trip is traded with an OE. The ability to trade an OE trip is a wonderful expansion of the Optional Exchange language. Trip trading is a contractual agreement, spelled out in Article 25, and that remains intact. There are no discussions going on related to eliminating this.

As a reminder, if you are on the Make-Up list and speak to Crew Schedule with specific requests, paralleling the HISEND language for Make?Up requests, Crew Schedule will make a note of those requests. If they say, “I have taken your request and if I get a trip that matches one of your requests before 1900, I will put it on your schedule,” you are in essence accepting one of the trips you have requested. A Crew Scheduler must say these words to create an obligation. If they do and a trip is assigned, you are responsible for the trip. After 1900, Crew Schedule must call to assign a trip.

If a crew has a mid-sequence MIC and is rescheduled from their original trip, but arrives in time to make their originally scheduled leg, they do have a chance to reclaim their trip. The crew must proceed to the gate, be there at least 15 minutes prior to departure, and speak to crew tracking to be put back on their original trip.

The rumor mill has been quiet this week but one really good one has reared its ugly head several times. Evidently, some pilot has it from a “reliable” source that there is a 25% across-the-board pay cut, additional furloughs and retirement of as many as 60 airplanes to be announced on February 1. The answer comes directly from upper management – there is absolutely no truth to this rumor!

On another subject, we continue to have 4,541 furloughed members, some who have been out for nearly three and one half years now. Please keep them as well as our 20 members currently serving in the armed forces in your positive thoughts. For those of you who were furloughed between the ages of 50 and 55, you should have received a letter from AAL regarding your pre-funding of retiree medical benefits. If you have not, you can contact American by email at [email protected]. Also, if you are on furlough, please remember to keep APFA updated on any address changes so you can continue to receive your quarterly Skyword.

In industry news:

The International Association of Machinists and Aerospace Workers (IAM), representing more than 100,000 mechanics, baggage handlers and ramp workers at the major airlines, called upon the Transportation Department on Thursday to convene a summit meeting of management, labor and consumer groups in an effort to help the struggling airline industry. The request came in a letter from Robert Roach, Jr., Vice President for Transportation at the IAM to Transportation Secretary Norman Mineta. Mr. Roach noted that after the terrorist attacks of 9/11 the Department brought together officials to discuss the challenges facing the industry. He called that session helpful but said “the industry has been caught in an unending slump” and solutions need to be found. He noted that since 2000, the major airlines have lost $30 billion, five companies have filed for bankruptcy protection, more that 110,000 jobs have been eliminated and workers have pay cut and benefits eliminated.

On Thursday, Delta reported the worst annual financial performance in the industry’s history, culminating with a $2.2 billion fourth-quarter loss. Northwest and Continental also posted large losses for the fourth quarter. Southwest Airlines bucked the trend and posted a profit although it was substantially less than a year ago.

Continental Airlines reported this week that it has cut $99 million in wages and benefits, part of the $500 million in yearly savings it says it needs to stay in business. These latest cuts were negotiated with ticket and gate agents and ramp workers. The airline is still in talks with pilot, flight attendant and mechanics unions.

United pilots are voting this month on a new contract that would cut pay by11.8 percent and scale back a bonus program. The ratification vote is due in by January 31. The agreement also includes language on the controversial pension issue. The pilots union agreed to waive its opposition to the termination of the company-funded pension plan on May 11, 2005. However, over the next 90 days, the company has agreed to work with the pilots and its other unions to explore other possibilities in the pension issue. The new proposed contract would also give the pilots rights to keep their pension plan if other unions are allowed to keep theirs.

In spite of the agreement reached, United Airlines is scheduling time on the bankruptcy court’s May calendar to address the pension issue if necessary. The company, according to Glenn Tilton, CEO of United, will ask the bankruptcy court judge to terminate employee pension plans if all the unions at United have not agreed to eliminate the retirement benefit by that time.

Ironically, according to the unions at United, executives are unwilling to give up their portion of the company’s “Success Sharing” bonus. The unions suggested that the bonuses be eliminated to help the company cut another $725 million in payroll costs. However, management negotiators wouldn’t hear of it! Top executives are eligible for bonuses of up to 40% of their salaries – translating to as much as a $285,00 bonus for CEO Glen Tilton.

In the midst of contract negotiations, Alaska Airlines is considering outsourcing its baggage-handling operation from SeaTac airport, putting 500 jobs at risk. The airline also is closing its flight-attendant base in Portland to cut costs. The International Association of Machinists, which represents the baggage handlers, said Alaska has replaced its demand for more than $2 million in concessions with a new strategy to save money by outsourcing the work. A statement posted Friday on the IAM website described Alaska’s threat as “a form of extortion.”

That’s it for today. Thanks for calling the APFA hotline.