11.04.05

Today is Friday, November 4th. This is Tommie Hutto-Blake with the APFA Hotline.

As we mentioned last month, since late spring of this year APFA, APA, TWU and AA management have been engaged in a cost analysis study reviewing ALL aspects of this 80+ year old airline. Assisting us in this top to bottom review were outside efficiency experts and over 300 individual employees, both union and non union. The one overriding agreement as we began this study was that the labor contracts would NOT become the target of this process. In fact, the overall goal was to collect operational data both about AA’s over all structure as well as any profitable competitor for natural comparisons. The purpose is to streamline our business model and ultimately return to profitability. We all realize that AA cannot continue to operate on borrowed dollars. It is clear that the road to restored viability must be a mutual goal for it to work.

Data collection was phase 1 of this Performance Leadership Initiative (PLI). Communications to the wider employee base was to be phase 2, leaving any solutions for the final conclusion. We have begun this second phase. You will be hearing and reading more and more in the weeks ahead about this analytical study and the mountains of data that has been collected and is currently being reviewed. Again, the parties have not reached the solution phase of this process.

Currently, there are no role models in our industry that have tried this exact approach. What we have seen, since 2001, is a troubled industry with senior management protecting their own wages and executive benefits, while they used the bankruptcy process to restructure their carriers by attacking labor agreements and breaking negotiated promises made to their employees. We have also seen more and more outsourcing of airline jobs either to other private vendors or the threat and sometimes reality of taking American aviation work abroad. It is as though these executives expected the gutting of their labor agreements and the destruction of airline workers lives to fix their problems.

We have also watched for almost three years, using United Airlines as an example, the expensive process of U.S. bankruptcy laws, which further deny a corporation of any sustainable profits, simply due to the huge costs of the BK process itself. In fact, as the Delta BK case opened on its first date in court, the BK Judge herself pointed out the over 100 lawyers in the courtroom representing the many different interest of the various parties – the corporation, creditors, stockholders, labor groups, and on and on.

We at AA are daring to be different. Daring to take another route. We are doing the hard work of attempting to take on this challenge together – labor and management – holding the reins of this seemingly out of control old stallion. If we succeed it will certainly be more rewarding than trying to destroy each other in the BK court. We are reaching for the long haul fix. Not a quick fix on the backs of labor. We believe the results will be a more lasting solution.

Shortly you will receive a letter signed by the entire APFA elected leadership displaying our pledge to focus on the challenges at hand and to assure you that we are prepared for action. We take pride in our long history of fighting to turn this job of ours into a respected career. And we will work long and hard to protect this position. You are a key component of this journey and we urge you to show your commitment by displaying the new bag tag insert enclosed in this letter. APFA is prepared for action and we need your support to preserve the flight attendant career.

And now stay on the line for the remainder of tonight’s hotline, Leslie

This is Leslie Mayo with the APFA Hotline for Friday, November 4, 2005.

Please remember the 13 APFA Flight Attendants who are serving full time in the military as well as our 4,106 furloughed members.

In an article in the Dallas Morning News this morning that followed yesterday’s announcement by APA that they would enter into bargaining with the company, APFA President Tommie Hutto-Blake was quoted as stating, “I trust the pilots are doing what they need to do, but I think we’re on a slightly different path.” Tommie also went on to state that the efficiency gaps for the AA Flight Attendants “are a blip compared to the pilot gaps.” In another article in the Ft. Worth Star Telegram, Tommie said, “We are not interested in collective bargaining at this time.” TWU’s Tim McAninley, was also quoted in the Dallas Morning News article saying, “We are looking for ways to be more productive, but in no way are we even looking at negotiations for concessions.” APFA will continue to find ways outside of our contract to identify cost savings to help improve American Airlines’ financial stability.

Fuel Watch: The crack spread (the price of refining crude to jet fuel) continues to drop and as of Wednesday, November 2nd it closed at $15.03 – a 70% drop in price from the cost to refine a barrel only three weeks ago. The average crack spread price prior to Hurricane Katrina was about $12. Fuel is also down a bit and closed November 2nd at just under $60 a barrel. However, this is still about double the price of a barrel of crude in 2003.

Bankruptcy Watch : On Wednesday, Delta asked a bankruptcy court for permission to throw out its existing contract with its 7,000 pilots in an effort to secure $325 million in pay and benefit cuts. If the bankruptcy judge approves Delta’s request, the airline will be allowed to impose wage and benefit cuts on the pilots unilaterally. The judge can accept, reject or modify the airline’s request.

Delta’s CEO also told retirees the airline is not sure whether pension and retirement benefits will stay intact while the company is in bankruptcy. Delta’s pension plan is under funded by more than $5 billion.

Pay cuts took effect November 1 for Delta’s nonunion employees. The cuts range from 10 percent for senior flight attendants to 7 percent for mechanics. Delta’s CEO and other executives and directors are also taking pay cuts of up to 25 percent. The pilots’ pay was cut by one-third last January.

US Airways is reconsidering its decision to outsource reservations calls. The company closed its reservations center in Pittsburgh and cut jobs in Winston-Salem, N.C. Many calls are now answered by outside companies in the Philippines and Mexico. Evidently, customers are unhappy with the change so Delta has decided to hire more agents in the U.S.

Joint News Watch : As we announced Wednesday, American Airlines and Southwest have agreed to a six-month trial reciprocal cabin seat agreement. This travel test will be effective November 15, 2005, and will be available for any active American Airlines, American Eagle, and Southwest Airlines flight attendant for travel in the domestic operation. Please visit www.apfa.org for details of this travel benefit for flight attendants.

As we announced last week, the Senate Commerce, Science and Transportation Committee, which is responsible for considering the possible repeal of the Wright Amendment, will hear arguments from both sides on November 10th. Go to www.apfa.org and click on the Wright Amendment link. Let your representative know you are not in favor of repealing the Wright Amendment.

Rep. Tom Price (R-Ga.), a member of the House Education and Workforce Committee, said this week that proposals to raise PBGC premiums and impose a participant penalty on companies that dump their pensions onto the PBGC during bankruptcy probably won’t survive conference. Congress is considering the fee hikes as part of the budget reconciliation process.

APFA News : Just a reminder, when considering last-five-day pay protection, ask yourself whether you are protecting your 70-hour guarantee or whether you are protecting additional hours above 70. Regardless of the HI1 header showing an obligation, if you are satisfied with just the guarantee, you do not need to do anything. You don’t need to go on the MU list or fly MU. You are done. If you want to protect additional hours with sequence pay-protection, you need to follow all the rules that apply for satisfying the obligation (refer to the On-Duty Contract Guide on page 23 for more detail). Don’t forget to be on MU for all the days that are in the obligation period or you will not be eligible for pay protection.

As a reminder, APFA and AA had previously agreed that in off-schedule operations (i.e., delays due to weather), working Flight Attendants did not have to call Crew Tracking to adjust departure time the next morning for minimum rest. There has been some confusion about whether this will be changing on December 1st with the new layover rest provisions. The answer is no, working Flight Attendants will still calculate the adjusted sign-in time for themselves, but the minimum has now become 8:20 plus debrief, instead of 8:00 plus debrief. The crew will have to call for “8 behind the door” if travel or other circumstances require more than the 8:20.

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