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Pilots Board Sends AA Deal In Principle To 8,000 Members

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photo9 Pilots Board Sends AA Deal In Principle To 8,000 Members

American Airlines pilots protest in support of the Allied Pilots Association on October 31 outside Terminal D at DFW (Chuck Schechner/CBSDFW)

NORTH TEXAS (CBS 11 NEWS)- The Allied Pilots Association (APA) board of directors voted late Friday morning to send its 8,000 members the deal in principle struck with American Airlines. The final count was 12-4 in favor of presenting the offer.

Once again, pilots will decide their fate — whether to accept a new contract with American or reject it, as they did overwhelmingly last August. “In our estimation, the union leaderships estimation, the [current] deal is different enough that it warrants a vote by or membership,” APA spokesman Gregg Overman explained.

After the board made their decision American Airlines spokesman Bruce Hicks sent out a statement saying -

We are pleased the Allied Pilots Association is putting the tentative agreement out for a vote. We worked hard in concert with the APA’s negotiating committee to structure an agreement that addresses the priorities identified by APA as most important to our pilots, while staying within the same cost savings target that we required from all other employee groups. We are confident our pilots will carefully consider the terms of the agreement as they cast their votes over the next few weeks.”

The pilots union fought for the same pay scale as Delta Airlines pilots and limits on the size of regional jets and code-sharing agreements American could have.

While the union hasn’t talked about specifics, a summary obtained by CBS 11 News, shows that pilots gained ground. (Summary below) But pilots still believe this is a concessionary contract.

Voting ends December 7 and the results will be announced then.

Regardless, if pilots approve the contract, it’ll be the first one they’ve signed since 2003, when pilots and the other major unions agreed to deep pay and benefits cuts to prevent American from filing for bankruptcy.

Now nine years later, American has already struck new labor deals with most of the workers represented by Transport Workers Union (TWU) and its flight attendants.

American has been trying to emerge from bankruptcy since filing Chapter 11 nearly a year ago.

After the pilots rejected American’s last, best contract offer in August, a bankruptcy judge allowed American to throw out the pilots’ existing contract, and impose new pay and work rules.

In September, American said angry pilots called-out sick and increased maintenance requests. The move caused the carrier to cancel and delay hundreds of flights.

American’s on-time performance plummeted to 58-percent in September. The airline’s on-time performance has improved significantly since then.

Aside from labor negotiations, American Airlines has been in talks with its unsecured creditors committee on a plan to leave bankruptcy. American has said it wants to emerge as a stand-alone carrier.

But US Airways has long sought a merger with American. US Airways also reportedly met with the unsecured creditors committee about its own plan for a path forward.

Some analysts believe there will be a merger between the two airlines, but the questions are timing, and who will be leading the process, American or US Airways.

The analysts believe if pilots agree to a new contract with American, then the airline will be able to control its own destiny. If pilots reject the deal with American, the analysts believe that will help US Airways.

All three main labor groups at American have favored a merger with US Airways under that airline’s management. But US Airways has its own labor issues. Its pilots and flight attendants don’t have a new contract, and its flight attendants union has called a strike vote.

American’s pilots took a strike vote, but because of on-going contract negotiations, the Allied Pilots Association has kept the results a secret.

Pay and Duration

§ Mid-contract adjustment improved to weighted average by available seat miles (ASMs) to minimize impact of US Airways o If United agreement ratified and APA secures a January 2013 date of signing: o Worst-case scenario, January 2016 adjustment would take 737-800 and S80 captain rates to $204/hour, a 17 percent increase o Best-case scenario, January 2016 (Delta and United only), 737-800 and S80 captain rates go to $217/hour, a 24 percent increase-Six-year duration, early openers at four years-   Date-of-signing (DOS) 4 percent raise and then annual pay raises of 2 percent, 2 percent, mid-contract adjustment, then 2 percent, 2 percent- Group II (A319 and 737-700) merged with Group III at the Group III rates

  • Only five groups (E190 Group, 737-800 Group, 757/767 Group, 777/787 Group and 747/A380 Group)
  • International override paid only for actual flying (industry standard; same as United and Delta)
  • No night pay (industry standard; same as Delta and United)
  • Current book per diem rates until DOS+3
  • DOS+3 = $2.00 domestic and $2.20 international
  • 5 percent first-dollar profit-sharing program

Fatigue

  • Fatigue calls paid
  • Paid events subject to review team with APA input
  • Fatigue memorandum of understanding has been agreed to (APA insisted on this language, it is industry leading)

Sick

Split sick bank starting no earlier than January 2014 (60 hours short-term per year, remainder in long-term bank)- Substantiation not required for short-term bank

Substantiation required to access long-term bank for absences more than 14 calendar days or if short-term bank depleted (Delta requires substantiation for sick events of 15 days or more, more than 100 hours in a year, or if chief pilot has reason to suspect pilot is not sick)- Annual sick sell-back program up to half of unused accrual, starting with 2013 accrual (industry leading; Delta and United do not have this)- Rapid re-accrual limited to time used (same as all other carriers with rapid re-accrual)- Elimination of long-term sick provision of 46 hours sick charged if on reserve (no other carrier had this provision)- Sick bank replenished after an injury on duty (June tentative agreement did not allow this)

Benefits

- Active medical – same as June tentative agreement, essentially a carbon copy of the Continental pilots’ $750 deductible plan

- Retirees under age 60 pay 100 percent for retiree medical (industry standard, same as Delta). Retirees over age 60 pay 100 percent for retiree medical; however, retirees over age 60 who give four months’ notice of retirement can cash out their sick time at retirement into a Health Retirement Account (at $25/hour), which can be used for medical premiums up to $25,000. Disability improved from June tentative agreement – 60 percent of income up to $8,000 (Delta 50 percent no limit, United 50 percent up to $8,000). Offsets for SSDI, Workers Compensation and State Disability. No offsets for earned (W2) income for first 48 months (was 24 months in the June tentative agreement). No premiums for disability benefits (United pilots pay premiums)

Pension

- 14 percent contribution to 401(k) plan

- Frozen A Plan (minimum funding requirements paid into plan by AA each year) o Delta pilot A Plan was terminated. Substituted a 15 percent defined contribution o United pilot A Plan was terminated. Substituted a 16 percent defined contribution- B Plan proceeds rolled to SuperSaver or pilot’s IRA

Scheduling

  • 84-hour max average line value with 82-hour rolling average over the year (close approximation to Delta)
  • Green Book duty rigs remain the same – (close approximation to Delta and most other legacy carriers)
  • 90-hour average individual monthly max (limits a pilot to a maximum of 1,080 credited hours over the course of 12 months)
  • Requirement to negotiate PBS memorandum of understanding by July 2013. Parameters and settings will be established by mutual agreement
  • Preferential bidding to begin in 2014- Current flight time/duty time limits until new federal aviation regulations applied in January 2014
  • All sequences subject to review of Fatigue Risk Management System with APA input
  • CPA bank eliminated, all fly-through time paid for the actual time flown in each bid month
  • Reassignments outside the original sequence footprint pay 150 percent
  • Sequence protection notification and obligation windows (patterned after Delta contract)
  • Pilot may opt out of sequence protection pay and obligation (management will not unreasonably withhold right to do so)
  • Management will develop a trip-trade system that will replace TTOT as we know it – language in Section 15 added that covers features

Vacation

- Green Book values and accruals with the elimination of the 42-day accrual step at 30 years of service

- Pilots can float all but one week of vacation

- Pilots can drop trips and charge to vacation bank

Pilot Bases

- STL pilot base will stay as we know it until an arbitration process has been concluded (approximately within 120 days of signing)

- No other pilot bases will be closed until at least fourth-quarter 2013

- Home base concept, which can allow some sequences to be built from cities that have large commuter populations

- Tulsa M&E flying retained under the collective bargaining agreement and patterned after many aspects of the check airman program

Reserve

- 18 days of availability for 73 hours

- Trips assigned on scoring system (Reserve Priority Value, patterned after Delta system)

- Reserve pilots can pick up trips on days off for pay above guarantee at management option

- Elimination of reserve guarantee pay for up to four days of military duty (we were the only carrier with this provision)

- Military pilot may move duty-free periods to cover military duty

Scope

- Regional aircraft limited to 76 seats with 86,000 lb. weight limit (same as Delta)

- Regional feed aircraft limited to 65 percent of mainline narrowbody fleet count

- Code-sharing with Alaska and Hawaiian (inter-island) o Other code-sharing arrangements limited to 50 percent of domestic ASMs- Code-sharing restrictions on AA hub to AA hub flying and proportionality on AA hub to partner hub

- Furlough protection down to the junior active pilot on the property

Miscellaneous

- APA can protest management compensation

- 13.5 percent equity stake in the new company

- APA reimbursed $5 million for bankruptcy expenses

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