06.03.05

This is Cathy Lukensmeyer with the APFA Hotline for Friday, June 3, 2005.

The U. S. General Accounting Office released a report yesterday on the funding of defined benefit pension plans that includes recommendations for congress to include in legislation. This report and United’s recent transfer of its defined benefit plans to the PBGC will be the topic of a hearing on Captiol Hill next Tuesday in the Senate Finance Committee. The hearing begins at 10am in 628 Senate Dirksen Office Building. This hearing may be covered on CSPAN or the hearing can be heard by going to www.capitolhearings.org and click on 628 Dirksen. (RealPlayer is required and can be downloaded by going to this site.) APFA Representatives will be present at this Senate Hearing.

As reported on last week’s hotline, although our pensions are in better shape than elsewhere in the industry, we have joined with our fellow unions in support of relief and protection for all pensions. However, we don’t need our defined benefit plans frozen or an extended funding period like some other companies and unions are advocating. Currently, none of the pension reform bills being considered by Congress offer us the specific relief we need. That is why APFA and the other AA unions are participating in the company-wide “Fly-in” to Washington, D.C., on June 22, 2005. We need to send the message to Congress that one size does not fit all. The employees of American Airlines need relief that will protect our pensions while allowing the company the flexibility to fund the plans over a reasonable length of time.

There has never been a time in our history when a unified voice has been more important. Join your fellow employees on June 22nd in Washington. Full details of the Fly-in can be found at www.www.apfa.org.

APFA’s Membership Opinion Survey Phase II conducted by the University of North Texas will conclude at the end of next week and we encourage all members who haven’t already done so to participate. Don’t let this opportunity to voice your opinion pass you by. Just log onto APFA’s website and click on the appropriate link.

Now, please stay on the line for the remainder of the APFA Hotline.

This is Leslie Mayo with the APFA Hotline for Friday, June 3, 2005.

Please remember our 12 APFA members serving full-time in the military and our 4,211 furloughed flight attendants.

Just a reminder about the DC Fly-In June 22nd – if you want to participate, the deadline to sign up is June 6th. Visit www.apfa.org for all the details and you can easily register there. Remember, AA is providing transportation from Chicago or Dallas on the 21st, returning the 22nd and shared rooms for those who join us on lobby day!

As APFA Vice President Brett Durkin announced earlier this week, APFA and AA have agreed to a six-month test relating to trip selections in foreign language markets. This was done in an effort to address several ongoing concerns regarding language-qualified flight attendants, Effective with the July bid sheet, the number of language-of-destination speaker flight attendants required on dual-aisle aircraft will change.

This modification should significantly alleviate the Company’s need for specific special qualifications and will, therefore, decrease the need to bid-deny for language qualification. Bid denials negatively impact a language speaker’s ability to hold a chosen selection by right of seniority and also have an effect on vacation bidding and reserve rotations. In addition, language qualification requirements often preclude speakers from the ability to trip trade or obtain PVD’s.

The contractual language concerning the number of speaker positions and cabin requirements is permissive of these changes and can be found onpage 531, Appendix I, Article 11.C.4. of the Contract. In accordance with this article, the Company is not obligated to provide a minimum number of speaker positions per aircraft; rather it is limited by a maximum number it can require.

APFA believes that this test will result in the reduction of bid denials for speaker and non-speaker flight attendants, improved trip-trading options for flight attendants with a language qualification and an improved pure seniority reserve list.

You can view the details and the entire text of the Speaker Test Letter of Agreement on the APFA website at www.www.apfa.org.

In industry news this week, members of the Aircraft Mechanics Fraternal Association at United Airlines ratified a five year contract that includes pay and benefit cuts and will save the carrier $96 million. A few hours later, the International Association of Machinists agreed in principle to a new contract, just beating a bankruptcy court deadline and heading off a threatened strike. These agreements completed UAL’s work force-related cuts totaling a staggering $3.8 billion annually over the past two years. Labor has accounted for more than half the cuts in bankruptcy: $2.5 billion annually from contract changes made in 2003, $700 million from 2005 reductions and $645 million from the termination of the four defined-benefit pension plans.

A bankruptcy judge ruled this week that US Airways can consider bids that could rival its plan to merge with America West Airlines. Interested investors will have 30 days to submit alternative plans. If no rival bids are proposed, the two airlines will be allowed to negotiate a merger pact.

Hawaiian Airlines has emerged from bankruptcy this week for the second time since 1993. The airline plans to operate on its existing fleet while it works to purchase more Boeing 767s.

The Associated Press reported that Delta has reached revised terms with General Electric Financial and American Express in return for maintaining at least $1 billion in unrestricted cash. The agreements will give Delta additional leeway in its efforts to avoid bankruptcy. Together, GE and American Express reportedly loaned Delta about $1.1 billion to avoid a bankruptcy filing last fall.

Unless Congress grants Northwest Airlines more time to contribute to its pension plans, the airline’s difficulty in funding those plans could result in a bankruptcy filing, a Northwest executive said this week. Northwest’s pension plans are $3.8 billion short. Current law requires the airline to fully fund the plans in five years. Northwest management wants to freeze defined-benefit plans and start new defined-contribution plans.

Don’t forget to visit www.apfa.org and sign up to join us on the Hill June 22nd. It could prove to be a very important day for American Airlines’ employees.

That’s it for this week. Thank you for calling the APFA hotline.