8.12.12 – (LAA) – LBFO Voting, AA Offering TSP Under the LBFO, Negotiating Update, Roadshows

This is Leslie Mayo, National Communications Coordinator, with the APFA Hotline for Sunday, August 12, 2012.

Ballots – LBFO Voting

Ballots are due Sunday, August 19, 2012, Voting on AA’s Last Best and Final Offer ends Sunday, August 19, 2012, at 10:00 a.m. Central Time. if you have not received your ballot or need a VIN and PIN to place your vote, please contact the ballot committee directly. The committee can be reached by emailing [email protected] calling 817.540.0108, ext. 8311. Remember that with online and telephonic voting, you can change your vote until the voting period concludes. Only the last vote you place will be counted.If you would like to review your prefunding balance, it is available on Jetnet. Look for the notice on the upper left corner of the main page.

AA will be offering a Travel Separation Program (TSP) under the LBFO to with the following criteria:

Unlimited D2 travel for the employee, spouse, domestic partner and dependent children
Five to nine years of company seniority equals five years of travel
Ten years or more of company seniority equals ten years of travel
No D1, D3, A9, Parent, Registered Companion, Other Airline Travel or ID20 is included with TSP
Imputed income for travel begins after 90 days
No age requirement

Every qualified request for the TSP will be accepted. The TSP will begin following the VEOP election period…

If the LBFO passes, the election period for the VEOP will begin Monday, August 20, 2012, at 0100 Central and closes Saturday, September 15, 2012, at 2300 Central. The TSP election period will open Monday, September 17, 2012, at 0100 Central and close Sunday, September 23, 2012 at 2300 Central.

From the Negotiating Team

Some of our members have asked us to communicate the positive side of a “No” vote. APFA’s bankruptcy attorneys and financial experts have expressed over and over that there is no positive side to a “No” vote. articularly in light of the position we find ourselves in as we get a peak under the kimono Wednesday when the judge renders his decision on the pilots’ contract. In fact there isn’t a single bankruptcy expert or advisor who can recommend a “No” vote.Some of the items in AA’s Term Sheet such as pay increases, 401(k) match and profit sharing were only applicable with a consensual agreement. Collectively, these items are worth over $100 million annually. The defined contribution provision which was part of the original $230 million ask by the company is worth approximately $42m. The profit sharing and the wage increases were not included in the $230m, but if a consensual agreement were reached, would have cost the Company $41m and $24m annually respectively. In sum, absent a consensual agreement AA will save $42m (defined contribution), $41m (profit sharing) and $24m (wage increases) for a total of $106m in avoided costs.

With a “No” vote, we will also lose LBFO improvements like the $1,500 lump sum (every little bit helps), the Early Out, vacation paid at trips missed until Preferential Bidding is implemented, which is quite a ways down the road, the five-hour minimum day (which will reduce to 4:30), the TAFB increase, the sequence pay protection to 100 hours and the 3% equity claim in the new American Airlines.

One thing that surfaces time and time again is the six-year duration of the LBFO. The 1113/LBFO side-by-side comparison online reflects the duration of the 1113 Term Sheet as based on a consensual agreement. APFA has elaborated on that fact at the Road Shows. If the term sheet is imposed (resulting in no Date of Signing) bringing the parties back to the negotiating table at some point, duration will be a subject of that bargaining and would not be determined by the Term Sheet.

Regardless, the LBFO allows for an industry pay adjustment at 36 months and re-openers at 48 months. At the snail’s pace at which previous negotiations have gone, it could stretch out to six years, but so could bargaining off the Term Sheet with little to no motivation by AA to strike an agreement. The company will have no reason to commit to real negotiations if we vote the LBFO down and the judge rules to abrogate, since they will have secured all the concessions they had ever hoped to attain with a “No” vote.

Who knows how long AA will drag its feet while we hope and beg for an NMB release that may not happen (the last NMB release was 11-years ago) especially in light of today’s political and financial climate in which we reside?

There is another point each Flight Attendant must consider: If the LBFO is ratified, we intend for it to be a short-lived Agreement in any possible scenario. 1) We see a merger with US Airways inside bankruptcy and move to the Bridge Agreement where we begin bargaining for a single contract with US Airways FAs; 2) AA’s standalone plan is approved and they exit bankruptcy alone, merge with another carrier outside bankruptcy and yet another contract must be bargained on behalf of both FA workgroups, or 3) AA emerges bankruptcy with the current management team and ignores analysts’ advice to merge, whereby, in a few years, American Airlines will quite possibly no longer exist.

Other Workgroup and Airline TAs On Deck

American Eagle pilots also reached a TA this week and are preparing information for member ratification. No details of that TA have been released.

US Airways Flight Attendants reached a deal with management this week. Terms have not yet been released.

American Eagle FAs will be sending their first TA out for a vote. Some rumors surrounding a recent communique by AFA in its announcement of the TA should be clarified.

Rumor:  Did the company improve upon the American Eagle TA or LBFO after it was voted down?
Answer:  Nothing has been submitted to the Eagle flight attendants for ratification. This will be their first swing at a contract inside bankruptcy.

Early Out

Several questions surround the VEOP and eligibility. Those FAs who have 15-years of Company Seniority by the close of the VEOP proffer are eligible for the Early Out.  You do not have to be an active FA. Furloughed FAs are also eligible for the VEOP provided they have 15 years of Company Seniority by the close of the proffer. Keep in mind Company Seniority does not accrue while on furlough or for the full duration on other types of leaves, and any necessary adjustments would not be made until the conclusion of that leave. If you had 15 years of Company Seniority at the beginning of your leave or furlough, you would qualify for the VEOP.We have received clarification from US Airways management, that if the LBFO is ratified, all benefits offered under the LBFO for those FAs who retire under the VEOP (Early Out), Article 30, or AA’s 50-55 rule, will be honored by US Airways in the event of a merger inside bankruptcy.Rumor Control
We have received some questions about the “$5 million administrative claim” for fees and expenses in Attachment I of the LBFO.

FACT:

APFA will be reimbursed for actual expenses submitted to the court for approval and reimbursement up to $5 million. This is your dues money that was spent defending our contract in a bankruptcy the flight attendants had nothing to do with rather than enforcing the collective bargaining agreement for which your union is charged. This administrative claim is contained in all three of the union TAs/LBFO and will, to a degree, restore to your Union treasury actual expenditures caused by management’s bankruptcy filing.The Administrative Claim is not a lump sum payment to line APFA’s pockets or any representative of the APFA either individually or collectively. Negotiating this amount is standard practice and did not influence APFA’s opinion of the LBFO.To put this into perspective, the following is an abbreviated list of airline unions over the past 10 years along with the bankruptcy fees and expenses for which they were reimbursed.

Delta – ALPA: cash and credit of up to $8 million for ALPA’s financial advisors
Northwest – ALPA: fees and expenses up to $1.5 million
United – AFA: fees and expenses up to $1 million
United – ALPA: fees and expenses up to $2.5 million
US Airways – AFA: fees and expenses up to $2.5 million
US Airways – ALPA: reasonable fees and expenses; no cap in the agreement

Isn’t it time we made management pay for some of its mistakes instead of taking it from the employees?
Recall Rights

APFA hopes to avoid furloughs with the offer of an Early Out (VEOP) contained in the Last, Best, and Final Offer. Neither the LBFO nor the Term Sheet modifies the existing unlimited recall rights for the current furloughees. For those FAs on the recall list as of February 17, 2011, they will be protected indefinitely. If there are further furloughs prior to the return of those on the recall list today, those newly-furloughed FAs would also have unlimited recall rights per the February 17, 2011, Letter of Agreement. Other than the furloughs just mentioned, our contract addresses the standard guideline for recalls, including the 5-year recall protection.If the LBFO is voted down and the judge grants AA’s 1113 petition to reject our contract, AA has stated that it will implement the March 22, 2012, Term Sheet. Currently, the Term Sheet does not modify the 5-year recall protection. However, there is a possibility that AA could decide to impose modifications beyond those in the Term Sheet, including the length of recall. If it were to do so, AA would be raising a legal question that, to date, no court has answered. APFA would challenge any attempt by AA to impose further concessions in addition to those in the Term Sheet but with no precedence in the form of court decisions addressing this issue, it is impossible to predict the outcome.

Unemployment Benefits

AA management has confirmed that it intends to protest any unemployment claims, as they have always had the right to do, for FAs who accept voluntary separation from the company.

Refunding Prefunding

Initially, Attachment G of the LBFO stated that AA’s portion of the prefunding would be returned after the 1114 process is complete and will be allocated to a Health Reimbursement Account (HRA). After considering the issues, of which there were many, including the HRA not being an interest-bearing account, APFA has asked that those monies instead be returned to the FA. As a result, Attachment G was modified and there will no longer be a HRA related to the pre-funding refund. The modified Attachment G was posted July 27th addressing this change and can be viewed on the LBFO page of www.apfa.org.

TA Summary Correction

The Pre-1113 Tentative Agreement Summary Highlights of Changes to Article 25 should read “AA proposal to Delete test of comparable time for trip trades/prohibit parking of trips to be eligible for TTOT and MU was withdrawn prior to the TA being signed off and is not part of the TA” We regret any misunderstanding this may have caused.Health Insurance

Look-Back Period

Q: When does the annual look-back period begin for purposes of maintaining subsidized health benefits?
A: Currently, the look-back period to maintain subsidized benefits is a rolling 12 months with a 420-hour threshold. This will remain in place – assuming ratification – through December 2013.The first annual look-back period to maintain subsidized health benefits under the LBFO will occur August 1, 2013, looking back to January 1, 2013. Since that is only 7-months as opposed to the 12 months in a regular look-back period, (for purposes of the health enrollment period in the Fall of 2013), the 600-hour annual threshold for obtaining 2014 subsidized benefits will be prorated to 350 paid hours from January 1, 2013 to August 1, 2013.Thereafter, beginning with the look-back on August 1, 2014, the required number of hours to maintain subsidized health benefits will be 600 annually.

Roadshows:

APFA will be conducting two more Roadshows this week.
 
Thursday – August 16 – Dallas/Ft. Worth

11am to 2pm
DFW Hyatt Regency – Terminal C
2334 North International Parkway, P.O. Box 619014,
DFW Airport, Texas, USA 75261
Tel. 972.453.1234
APFA will pay for parking. Do not use your Toll Tag when entering airport. Bring your ticket to the meeting for the concierge to stamp.

Friday – August 17 – Miami

11am to 2pm
Miami International Airport Hotel (Hotel MIA)
Across from Concourse E Security Checkpoint
7th Floor Conference Room
Tel. 305.871.4100That’s it for now.

Thank you for calling the APFA Hotline
 AmericanAirlines + US Airways
“Our Future Depends On It”

Leslie Mayo
APFA National Communications Coordinator