10.17.08 – (LAA) – AA Earnings, Continental and Southwest Report Losses, AMR Plans to Purchase 787 Dreamliner Aircrafts

You have reached the APFA weekly HotLine update for October 17, 2008. This is Frank Bastien, National Communications Coordinator.

We have come to that time yet again when airlines report earnings for the previous quarter, this time the 3rd quarter of 2008, the three-month period of July, August and September. AMR was among the first to announce and the balance sheet came in showing a profit of $45 million, after including several one-time gain items, mainly the sale of American Beacon Advisors for $432 million. Without such items, AMR would have reported a $360 million loss. Delta reported results the same day as American, turning in a net loss of $50 million for the quarter.

Continental and Southwest were the other big airlines reporting this week. Continental’s loss came in at $236 million, $50 million of that attributed to the effects of Hurricane Ike alone. Southwest meantime turned in its first quarterly loss in 17 years, $120 million for the quarter. However, this included a write down of $247 million for a decline in value of its fuel hedges. Without that write down, Southwest would have shown a $69 million profit.

As usual, higher year-over-year fuel costs are blamed for the bulk of the losses, despite the sharp drop in oil prices since the high of this past July. Capacity cuts or expansion slowdowns, along with the increase in incremental fees, such as those for check baggage instituted by most carriers, American included, are just now starting to show an impact.

Along with its quarterly earnings report, AMR revealed plans to purchase 42 Boeing 787 Dreamliner aircraft, to be delivered between 2012 and 2018, with options to acquire 58 more between 2015 and 2020. The agreement contains some contingencies on the purchase, related to reaching agreement with the pilots, represented by the APA. Boeing, meantime, is still in dispute with its engineers, represented by the IAM. Talks at Boeing recently broke down, with union concerns over outsourcing being cited as the main sticking point. The manufacturer reports over 55 customers for the 787 Dreamliner, with nearly 900 orders.

The enrollment period for your 2009 benefits is now open and runs through October 31. An HI6 message issued this past week by the Company is important enough to be repeated here:

U.S. employees who submitted their 2009 benefit elections, and then made subsequent changes on or before Monday, Oct. 13, should access the Benefits Service Center to verify that their current elections are accurately recorded on their Benefits Election Summary. While initial elections were saved, follow-up changes to benefits and dependent information may not have been recorded. Corrections to the Benefits Service Center have been made, but anyone who made changes after submitting initial elections should revisit the Benefits Service Center and verify changes. Employees can make changes to 2009 benefit elections as many times as they want before the enrollment deadline of midnight, Central Daylight Time Friday, Oct. 31, 2008.

As we input our bids for November this weekend, one canít help but notice the approach of the 15th anniversary of our strike against American on November 18. Many of us are reminded of the negotiating climate of that time and its parallels with today. Events planned around this momentous anniversary will be announced on this HotLine and on the Negotiations page of the APFA website as they are developed. Meantime, your Negotiating Team welcomes your continued input on issues and concerns important to you. Email them at: [email protected].

Check the Wings Foundation website at www.wingsfoundation.com for the latest events and Wings Rep contact information for your base.

Remember there are still 1,184 of our members on furlough and awaiting recall. And thank you for calling the APFA HotLine.

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Your APFA Negotiating Team, along with our attorneys and economic advisers, pays close attention to this weekís reports of aircraft purchases and quarterly earnings as they continue talks with American over a new contract. While recent talks between the scheduling subcommittees have focused on Article 10, Reserve, the teams have also met and tentatively agreed on four articles that neither party opened with. These Articles are 15 – Period of Probation, Article 17 – Transfer to Non-Flying or Supervisory Duties, Article 28 – Dispute Resolution and Grievance Procedures and Article 29 – System Board of Adjustment. As pleased as the APFA Team is that agreement has been reached on some items, there is still no progress to report from the compensation subcommittee over the issue of Onboard Retail Sales. APFA maintains its firm position that AA cannot unilaterally implement a Retail Sales program as it is an item subject to negotiation.

On October 15, the National Ballot Committee, in conjunction with Whitley Penn and Associates, certified the results of the LGA Vice Chairperson election. Willie Aviles received 345 votes and Joey Granata received 385 votes. Twenty-four ballots were void because of dues arrears for a total of 754 ballots received. Joey Granata will assume office immediately for the remainder of the two-year term of office ending March 31, 2009

Our ìPax for Paxî ñ Peace for Passengers – campaign on October 10 drew plenty of positive press notice beyond the four airports where InfoReps were present, educating the public on our talks with AA. The www.paxforpax.com website is the place to direct passengers for information on how they can lend their support in our fight for better working conditions for us and a better flying experience for them.

American Eagle Flight Attendants, through a press release from their Union, the AFA-CWA, have added their voice to ours, in an effort to ìÖimprove working conditions as flight reductions have led to grueling schedules for [Eagle] Flight Attendants as well. We know firsthand that cuts and
reductions come off the backs of all front line employees of AMR.

“Management continues to reward themselves with millions of dollars in bonuses. Flight Attendants in this country are working more for less, and it is time to restore some of what has been lost over the years.

“History has taught us that what happens at one airline often has a domino effect at other carriers. That is why AFA-CWA supports the efforts of our colleagues at the Association of Professional Flight
Attendants (APFA) as they continue to focus on improving the quality of life for all Flight Attendants.”

The APFA Fall Board of Directors meeting will be held over two days on October 21 and 22 at the Marriott Solana in Westlake, Texas. Scheduled start time each day is 9 A.M. Members in good standing are invited to attend the open portions of the meeting.

The APFA Health Coordinator strongly advises all Flight Attendants to carefully review information regarding their 2009 Health Benefits enrollment arriving in the mail and available on the benefits section of Jetnet. Unlike in prior years, the company has contracted with additional plan administrators. Depending on your plan and your address, you may see a change to your default administrator. Additionally, the Point-of-Service plan (POS) permits you to choose another of the three administrators at an additional cost. If you are accustomed to allowing your choices to carry-over from the previous year without going online to complete your elections, you may find yourself with a new plan administrator for 2009. Donít be caught unaware. Review the benefits information and make an informed choice. Email the Health Department Representative on Duty at: [email protected], or call headquarters extension 8301 if you have questions.

There is a change from what was announced previously regarding the procedure for those who opt out of benefits coverage. If you opted out of coverage for 2008 and fail to make an election for 2009, your opt-out status will carry over into the new year. This information supersedes what we had been advised and what was announced in earlier HotLines. The Health Department recommends that all Flight Attendants actively make an enrollment selection this year and not depend on rolling over to the default choices. Additionally, it is always a good idea to print a copy of your completed enrollment form for your records.

Flight Attendant retirement seminars will take place during October at LGA, JFK and ORD. The LGA seminar is on Tuesday, October 21 and starts at 3 P.M. in the 3rd floor conference room, hangar 3. The JFK seminar will be held Wednesday, October 22 in the 4th floor conference center, over by pilot operations, beginning at 1 P.M. The ORD meeting will be from 2 P.M. to 4 P.M. Wednesday, October 22 in the west conference room.

Do you know where you will be on Election Day? Absentee voting is the way to ensure your voice is heard in the upcoming U.S. National Elections. To find out how to vote absentee in your state, call or visit the website of your local election board, or go online to any number of informational websites. One recommended site is www.longdistancevoter.org linked to from our main page. This site can assist you in applying for an absentee ballot in the event you may be away from your polling place on November 4.

Speaking of voting, in a resolution passed September 15 during the second quarterly meeting of 2008, the APFA Executive Committee unanimously endorsed Illinois Senator Barack Obama for U.S. President in the upcoming national elections. In a letter to the Senator, President Laura Glading stated: ìYour work as a community activist, Illinois State Senator and U.S. Senator has demonstrated your commitment and support of the issues that are critical to the economic prosperity of workers and working families.î In a national press release announcing the endorsement, President Glading declared ìOn every issue important to Flight Attendants Ö Senator Obama has been in our corner. From protecting health and safety in the workplace to fighting for U.S. jobs to preserving Medicare and Social Security and advocating a fair and just tax policy for working families, Senator Obama is on our side.î You will find a link to the Obama endorsement press release on the APFA website main page.