Sky Talk

America West pilots ask federal court to force US Airways to implement Nicolau seniority list

A group of former America West pilots filed a class-action lawsuit in federal court in Arizona on Thursday asking for an injunction to prevent US Airways and the US Airline Pilots Association from taking any action to integrate pilot operations without using a seniority list set out in a previous arbitration.

If a judge rules in the group's favor, it could hold up the proposed merger between US Airways and American Airlines even though the group explicity does not name American's parent company, AMR Corp., or the Allied Pilots Association as defendants in the filing.

Represented by a group called Leonidas, the former America West pilots have been fighting for the implementation of what is called the "Nicolau Award" that included a seniority integration list for US Airways and America West pilots that did not use a strict date-of-hire rule.

"This action seeks an order enjoining USAPA from taking any steps to integrate pilot operations that does not implement the seniority order set out in the Nicolau Award," the filing said.

At the time the Nicolau Award was announced by an arbiter, US Airways pilots, who were unhappy with the seniority list, chose to decertify the Air Line Pilots Association as their union representation and formed their own union, USAPA, that became the bargaining union for all pilots at the newly-merged US Airways and America West airline.

America West pilots filed a lawsuit saying that USAPA was not fairly representing them by not implementing the Nicolau Award but a federal appeals court threw the suit out saying it was not ripe for legal consideration because USAPA and US Airways had not implemented an alternative seniority agreement.

In its filing on Thursday, the America West pilots argued that the legal issue is now ripe.

"This action became ripe on or about February 13, 2013, when USAPA, APA, US Airways and AMR entered into the Memorandum of Understanding Regarding Contingent Collective Bargaining Agreement in which USAPA dishonors the Nicolau Award without any legitimate union purpose for doing so, in breach of its duty of fair representation," the filing said.

US Airways declined to comment on the legal action.

USAPA filed a motion on Wednesday in AMR's bankruptcy case, asking the bankruptcy court to prevent the former America West pilots from taking legal action to stop the merger. A pre-trial conference on that filing is scheduled for April 23.

-Andrea Ahles

 

USAPA asks bankruptcy court to keep America West pilots from interfering with American-US Airways merger

US Airways pilots' union is asking the bankruptcy court to prevent lawyers representing former America West pilots from interfering with the merger of US Airways and American Airlines.

In a filing made in American's bankruptcy case on Wednesday, the US Airline Pilots Association asked the court to block any possible litigation that former America West pilots may file. USAPA said it had received letters from Leonidas, a firm that represents America West pilots, that detail Leonidas intent to file lawsuits to stop the merger unless a previous arbitration ruling on pilot seniority - called the Nicolau Award - is implemented prior to the merger.

"If Defendant is permitted to prosecute the Action, there is no question that the action itself would distract parties in interest, such as USAPA, US Airways and Debtors, from the important negotiations and tasks attendant to the Merger, would disrupt the orderly integration of the pilot work force, and any injunctive relief granted would have a material and direct impact on the ability of Debtors to consummate the Merger," the filing said.

Former US Airways pilots and former America West pilots have been fighting legal battles over seniority integration for several years and have yet to integrate into one work group following the two airlines' merger in 2005.

At issue is the Nicolau Award which gave higher seniority placement to several younger America West pilots than US Airways pilots. The arbiter had ruled that since US Airways was in bankruptcy at the time of the merger, US Airways pilots had diminished career expectations and were likely to have lost their jobs if the merger had not occurred. As a result, many of the US Airways pilots were given lower seniority.

US Airways has never implemented the Nicolau Award, although management has asked the courts to decide the issue.

In its filing, USAPA argued that Leonidas did not represent as many former America West pilots as it claimed, pointing to the recent vote results of the memorandum of understanding.

USAPA members, including the former America West pilots, voted in favor of a memorandum that supports the American-US Airways merger and lays out a framework for wages and work rules post-merger. The union said 97 percent of the pilots based in Phoenix, which would be former America West pilots, voted in favor of the memorandum and are in favor of the merger.

-Andrea Ahles

 

How do former TWA pilots fit in to the US Airways merger? American has an answer

Former TWA pilots, who have been fighting for seniority since its airline was bought by American back in 2001, may get some sort of seniority protection even as American prepares to close its pilot base in St. Louis.

In a Securities and Exchange Commission filing made on Wednesday, American addressed the question of what will happen to TWA captains that were hired back in 1988. It appears that prior to any seniority integration completed in the proposed US Airways-American merger is settled, the TWA pilots will go through arbitration first.

The arbitration will address contractual protections for the former TWA pilots and whether or not the pilots are guaranteed captain positions at American. Any seniority integration agreement with US Airways will have to abide by the TWA arbitration result, the company said.

Last year, a group of TWA pilots filed a lawsuit against American, alleging they received poor seniority placement at American after the TWA purchase and that the one protection they were given - that a St. Louis pilot base would remain open - was being taken away as part of American's bankruptcy restructuring. The case is still pending in a federal court in Missouri.

Keep reading for American's full response to the TWA question.

-Andrea Ahles

What is going to happen to the TWA captains that have been captains for more than 15 years, but have a seniority number of about 6,000 and a hire date of 1988?

A: Prior to any seniority integration with US Airways, the Company and APA will conclude an interest arbitration under LOA 12-05, dealing with the termination of fence provisions under Supplement CC. The arbitration will determine substitute contractual protections for the former TWA pilots as a result of the termination of Supp CC, including whether former TW pilots are guaranteed certain CA positions on American. The seniority integration process with US Airways will be subject to the outcome of the LOA 12-05 interest arbitration.

American cannot speculate on the outcome of the seniority integration process with US Airways. The MOU provides that, if the merger is approved, the new company and committees representing the interests of the pilots will conduct a seniority integration process that complies with the federal McCaskill-Bond legislation. That process would begin with negotiations, but if the parties are unable to achieve a single seniority list through those discussions, the matter would be submitted to arbitration as outlined in the legislation. For more information on the anticipated timeline for seniority integration and other processes, please refer to Merger 101 on new Jetnet.

Parker and top executives met with American and US Airways pilots unions on Thursday

US Airways chief executive Doug Parker met with leaders of both American Airlines and US Airways pilots unions on Thursday.

At the meeting, which occurred at the headquarters for the Allied Pilots Association in Fort Worth, Parker fielded questions from APA board members and representatives from the US Airline Pilots Association.

In a joint statement, the APA and USAPA said Parker, along with US Airways president Scott Kirby and executive vice president Elise Eberwein delivered brief remarks to the boards.

"The pilot representatives emphasized the need for a new culture that effectively engages employees and recognizes our pilots' leadership role in the operation of the airline," the statement said. "The executives acknowledged the need to create a new corporate culture and to build trust and credibility between the airline's management and front-line employees."

Keep reading for the full statement from APA and USAPA.

-Andrea Ahles

Joint statement

Today the Allied Pilots Association National Officers and Board of Directors and the US Airline Pilots Association National Officers and Board of Pilot Representatives met at APA headquarters in Fort Worth, TX to affirm our mutual support of the merger between American Airlines and US Airways. The APA and USAPA leadership likewise agreed to work cooperatively to represent the best interests of all of our pilots.

Also today, the USAPA and APA boards met with US Airways Chairman and CEO Doug Parker, President Scott Kirby and Executive Vice President, People, Communications and Public Affairs Elise Eberwein. The executives each delivered brief remarks to the pilot union boards and fielded questions from APA and USAPA representatives. The pilot representatives emphasized the need for a new culture that effectively engages employees and recognizes our pilots’ leadership role in the operation of the airline. The executives acknowledged the need to create a new corporate culture and to build trust and credibility between the airline’s management and front-line employees.

APA videoed the first portion of the discussions with the US Airways executives and both unions will post the video for viewing by our respective members within the next few days.

The APA and USAPA boards then met in closed session with the US Airways executives, which afforded the opportunity for a more direct and, at times, pointed exchange between the executives and pilot representatives.

The APA and USAPA leadership look to the future with cautious optimism. The pilots represented by APA and USAPA have made substantial individual and collective sacrifices to put both airlines in a position to execute this merger, and we look forward to reaping the benefits of working for the world’s premier airline.

American and US Airways pilots unions issue joint message

The Allied Pilots Association and the US Airline Pilots Association issued a joint message from their presidents, APA's Keith Wilson and USAPA's Gary Hummel on Thursday morning.

Here is the full letter.

Fellow Pilots,

On the morning of April 15, 1926, a young aviator named Charles Lindbergh stowed a bag of mail in his DH-4 biplane and took off from Chicago for St. Louis. Later that day, he and two other pilots flew three additional loads of mail back to Chicago, and their small enterprise eventually became known as American Airlines. In 1937, a Stinson Reliant departed Pittsburgh and pioneered airmail pickup service, without landing, along the Ohio River Valley. The history of US Airways had just begun.

Today’s merger announcement for the New American Airlines is the evolution of that history. The world of aviation has changed much since the days of Lindbergh. There have been countless mergers, bankruptcies and new business plans, as well as tremendous changes in federal airline policy, most notably the Airline Deregulation Act of 1978. For the past two decades and particularly post-9/11, our profession has been under attack. Airline managements have used pattern bankruptcies to dramatically lower the pay, benefits and retirement plans of professional pilots. That trend must change – not only for the sake of our careers, but for the sake of those who follow in our footsteps.

Long before this merger was announced, our two unions worked collaboratively, along with the UPS pilots of the IPA and the IBT local 1224, to speak on behalf of 22,000 airline pilots through our trade organization, the Coalition of Airline Pilots Association (CAPA). Through CAPA, we made great strides in shaping an industry that is ultimately responsible for protecting the pilots we represent, the cabin safety professionals we depend upon, and the passengers we have been entrusted with. We will now turn our successful, cooperative effort toward the bargaining process. We will utilize the best people and resources from both unions to work toward an industry leading Joint Collective Bargaining Agreement, and to rebuild an airline that we can all be proud of. We believe that our pilots deserve nothing less than our sincere commitment for a win-win conclusion to the entire merger integration process.

This is a new day and we need to look toward the future – not the past. Our union leaders are committed to this merger, but we cannot do this alone. We need your help. We also expect the New American Airlines to make the economic commitment necessary not only for the success of our new airline, but for you and your family’s future as well. Together, we can take our NEW airline and our profession to new heights.

Captain Keith Wilson

APA President

Captain Gary Hummel
President, USAPA

-Andrea Ahles

Unions applaud merger between American and US Airways

With the early morning merger announcement from American Airlines and US Airways, several labor unions issued their statements applauding the deal.

Allied Pilots Association spokesman Dennis Tajer - "With a strong, proven leadership team focused on partnering with frontline employees, improving reliability and customer service, and expanding our network, the new American Airlines will return to a position of industry preeminence. Today marks the culmination of a strategy that APA began pursuing early last year. Our primary goals were to create a strong future for a post-bankruptcy American Airlines, and to protect and enhance our pilots’ careers. This merger accomplishes those goals."

Association of Professional Flight Attendants president Laura Glading - "It’s been a long, tough road but the result is well worth it. Today’s announcement proves that everyone benefits when labor has a seat at the table. The new American will provide job security and fair compensation for all employees and another great option for the flying public. I'm looking forward to working with our new colleagues as our operations and cultures combine. Flight attendants from both companies are eager to help build a strong and competitive airline and restore American's prominence."

Association of Flight Attendants-CWS, which represents US Airways flight attendants - "The merger between US Airways and American Airlines holds great opportunities for Flight Attendants. We will raise the bar for our profession and we look forward to working as key partners. US Airways Flight Attendants have been instrumental in the overall success of our airline. Our hard work and sacrifices have helped turn US Airways into the thriving airline it is today. As full partners in the world’s largest airline, we expect meaningful participation in its benefits. We look forward to working with our colleagues at American in improving wages, benefits, work rules and retirement security for ALL Flight Attendants at the new American."

US Airline Pilots Association president Gary Hummel - "This merger came about due to the cooperative efforts of both management and labor. As pilots, we are proud to be a part of the New American Airlines and look forward to working with our colleagues at the Allied Pilots Association – and building our new company into a financially strong, premier global carrier. We are proud to be a part of the new American Airlines. The success of this merger will signify the cooperative effort of professional pilots and management working together. We are pleased to be working with our colleagues of the Allied Pilots Association who are also committed to seeing our new company succeed, and ensure a safe flight for our passengers each and every day. That is what we do."

-Andrea Ahles

Pilots union answers a few questions about "if a merger, then..."

In a note to members on Wednesday, the Allied Pilots Association explained to pilots why they haven't gotten their 13.5 percent equity stake in American yet and what happens if a merger with US Airways goes through.

The lengthy question-and-answer document reiterated that pilots will get their 4 percent raise from the newly ratified contract in their February 25 paychecks. It also explained that pay raises in the early years of the contract would be higher if a merger occurs but in turn, the mid-contract adjustment raise would be lower.

Keep reading for the full message from the APA.

-Andrea Ahles

As APA continues receiving questions regarding implementation-related issues, a potential American Airlines-US Airways merger, monetization and distribution of the 13.5 percent equity stake and other timely topics, our subject-matter experts (SMEs) will continue providing answers. Here are some of the latest questions your APA leadership has been receiving, along with answers from the appropriate SME.

COLLECTIVE BARGAINING AGREEMENT IMPLEMENTATION
 
Q: When will we see our 4 percent date of signing pay raise and at what point will our paychecks reflect the increase in our medical costs?


A: Date of signing for our current collective bargaining agreement was Jan. 1, 2013. All flying done in January will be paid out on your Feb. 25 paycheck and will reflect the 4 percent pay raise. This pay raise will also apply to any future CPA and vacation payouts. The medical cost increase likewise took effect on Jan. 1, 2013 and can be found in the pre-tax column on the payroll payment portion of your pay stub beginning with the Jan. 25, 2013 checks.


Q: Why would the mid-contract pay adjustment be lower if we merge with US Airways in bankruptcy?


A: The pay raises in the earlier years that are part of the memorandum of understanding are larger than what was originally bargained for in the collective bargaining agreement with American Airlines. Therefore, the percentage amount required to meet the mid-term adjustment would be smaller if American Airlines merges with US Airways while still in bankruptcy.

Q: Why do the bid sheets still reference sections and provisions of the 2003 contract like Secondary Trip selections (18.B.3.a.) and Schedule Enhancement Period (19.B.2)? Were these provisions not eliminated with the new contract? Also, when will the 12-year captain rates be updated on the bid sheets?

A: Until the implementation of certain provisions of the 2012 CBA such as preferential bidding and the new trip trading system (TTS) projected for 2014, some former provisions of the 2003 CBA (e.g. Secondary Trips and SEP) will remain in the interim. Starting with the March 2013 bid sheet, the updated 12-year captain rates will be reflected in the bid lines.
 
IF AMERICAN AIRLINES AND US AIRWAYS MERGE
 
Q: If American Airlines and US Airways merge before American exits bankruptcy, how soon do we begin negotiating for a Joint Collective Bargaining Agreement (JCBA)?

A: Joint negotiations toward a JCBA would begin as soon as practicable following the bankruptcy court’s approval of a Plan of Reorganization (POR). Completion of the JCBA negotiations could occur anytime between the POR being approved, but no later than 30 days past the National Mediation Board’s legal finding of a “Single Carrier.” The filing for “Single Carrier” status must be made within four months after the POR is approved. The approval of “Single Carrier” status by the NMB is expected to take roughly six to eight months after that filing. In the event we are unable to complete JCBA negotiations, any remaining items will be submitted to binding interest arbitration.

Q: What would the impact be for granting length of service for pay, etc. for furloughees if there is an upcoming seniority integration? If we do not receive credit for LOS, could it negatively affect us in a seniority integration?

A: The determination of longevity for pay and benefit purposes should have no impact one way or the other on the seniority list integration under the McCaskill-Bond “fair and equitable” standard. Historically, a seniority list integration has determined only “competitive” or “bidding” seniority, in which you exercise your seniority in relation to the seniority of other pilots. Longevity for compensation purposes has historically been treated as a separate matter to be determined through contract negotiations.

Q: If I opt for deferred status on furlough recall, could it negatively affect my seniority in a merger scenario?

A: If you opt to defer recall from furlough and allow a more junior AA pilot to return from furlough, it will not affect your placement on the pre-merger list AA seniority in a seniority integration. The internal order of the pre-merger seniority list cannot be changed. In addition, the memorandum of understanding contains traditional “no bump/no flush” provisions. Therefore, if you are on furlough when the integrated seniority list is implemented, you will not be able to displace a more junior active pilot, but will have to wait for an open job to which you are entitled.

In the seniority integration negotiations and/or arbitration, there may be some arguments about what “pre-merger expectations” you would have as a pilot in a deferred status. While some might argue that a “deferred” pilot should be treated as if he is on furlough, others would argue that a pilot who exercises a negotiated, contractual right to defer recall and keep his recall rights should be treated like any active pilot since he had sufficient seniority to return to work. In an arbitration, how those issues get resolved is ultimately up to the arbitrator. You can expect APA to advocate vigorously for the interests of the pilots we represent.
 
EQUITY DISTRIBUTION
 
Q: How will the equity distribution be handled with regard to pilots retiring after Jan. 1, 2013, prior to age 65, and before the equity stake is actually monetized and distributed? Will they qualify for any and all silos?

A: A pilot who is in a status qualified for the distribution as of the initial eligibility determination date (Jan. 1, 2013) will remain qualified regardless of subsequent changes in status.

Q: Why do we have to wait until the end of the year to receive our share of the 13.5 percent equity stake? I want this money now.

A: The money doesn’t actually exist yet, since our equity stake is in the reorganized American Airlines. Timing of the monetization and distribution is subject to several factors and considerations. Some of those factors include the timing of the exit from bankruptcy, tax ramifications and deferral strategies, sale timing to maximize price and value to the pilot, and the lead time required by management to distribute the proceeds as compensation to the individual pilots according to APA’s instructions.

The monetization timing is being driven largely by whether American Airlines exits bankruptcy as a stand-alone entity or as an entity resulting from a merger with US Airways. The merger process is likely to move the exit date and subsequent monetization out several months.
 
B PLAN
 
Q: What happens to the B Plan unit value while the plan is frozen? Will the unit value reflect the recent stock market increase when it’s finalized?

A: The bulk of the equity securities in the B Plan were liquidated during a three-week period beginning around mid-October 2012. If you can visualize an “average world equity value” during that period, that’s effectively where we locked in. The funds are now in short-term Treasury securities, with the current value varying only a very small amount. Also, more to the point, we know that we will “get out whole.” That is, assuming the U.S. government does not default on its debt obligations. This means that your B Plan benefit will not participate in any significant moves in the world equity markets between November 2012 and June 2013, whether those moves are positive or negative.

The final audited B Plan unit value will be established in the next several weeks. The final distribution should take place in late June 2013 and will include any interest accrued since the plan was frozen—approximately 0.05 percent annualized, or around five basis points.

US Airways pilots to begin voting on MOU on Friday

US Airways pilots will begin voting on the memorandum of understanding between US Airways, American Airlines and the two pilots union on Friday.

For these pilots, who have not had a new contract since US Airways and America West merged in 2005, the MOU would result in pay increases between 13 percent and 35 percent compared to what the US Airways pilots earn today.

"Our pilot group has been without a reasonable contract for far too long. We are confident that the resulting document offers our pilots substantial progress towards industry standard pay and working conditions that we have long deserved," the US Airline Pilots Association said in a statement on Tuesday. "We feel it benefits all pilots, no matter where you are on the seniority list. Those with not much time left prior to retirement will be able to increase their retirement savings with higher DC contributions accompanied by higher pay rates. Those with more time left will see substantial pay increases throughout the life of the contract, to better provide for themselves and their families."

Voting will begin on January 18 and end on February 8, USAPA said. The MOU will not go into effect unless there is a merger between US Airways and American Airlines.

Keep reading for the full update from USAPA.

-Andrea Ahles

NAC Update

As you know, your union reached agreement on a new proposed Memorandum of Understanding (MOU) that would apply if there is a merger of US Airways and American Airlines in bankruptcy. On January 4, your Board of Pilot Representatives voted unanimously to recommend the proposed MOU to you, the pilots of USAPA, for your review and ratification. Click here to read the joint BPR/Officer message.

Today, under the terms of the Non-Disclosure Agreement, which remains in place, the parties have agreed that the MOU can be presented to the pilots of USAPA and APA. As a result, details of the proposed MOU and an accompanying side-letter are being mailed to you via first class U.S. Mail this week. Please review the documents prior to making a decision on how you will vote. In addition, the Negotiating Advisory Committee will visit each domicile on the following dates to talk to you about the contents of the attached MOU and the associated APA 2012 Contract, and answer any questions you might have. The NAC will give presentations 2-3 times each day and will also be available for questions at other times during the day.

Base	Dates (Times)	Location
DCA	Thurs, Jan 17th (9-2)	Conference Center, Terminal A, ground floor, next to the lobby of the old terminal
	Thurs, Jan 17th (2-5) Fri, Jan 18th (9-1)	Room 264 in terminal A
CLT	Mon, Jan 21st (4 PM)	USAPA Headquarters
	Tue, Jan 22nd (9-5) Wed, Jan 23rd (9-4)	Auditorium, above the Food Court
PHX	Thurs, Jan 24th (9-5) Fri, Jan 25th (9-1)	International Concourse, Meeting Room next to British Airways Club, above B23
PHL	Mon, Jan 28th (9-5) Tue, Jan 29th (9-4)	Airport Tour Room, inside security, between concourses C&D, near Au Bon Pain

These sessions are open to all members. Keep in mind; you will not be affected by the MOU unless it is approved by a USAPA membership ratification vote. Balloting will begin on January 18 and end on February 8.

What follows is an outline of the major points of the MOU and the accompanying side-letter. This is only a short summary; you will need to read the entire document and attend one of the Road Shows to become fully informed on these documents.

Summary of Major MOU and Side Letter Elements

• Pay rates

• 
  
  • US Airways pilots will be paid the same as American pilots starting on the Effective Date (of approved Plan of Reorganization).
  • After the Effective Date, US Airways pilots will receive a retrospective payment based on the new pay rates back to the date of pilot ratification.
  • These new rates will result in pay increases ranging from 13% to 35% over today’s rates for this year, plus substantial annual increases for the life of the contract.

• Retirement Contribution Rates

•  
  • 14% as of Effective Date

• Joint Collective Bargaining Agreement (JCBA)

•  
  • The recent APA 2012 collective bargaining agreement will serve as the baseline for a new contract, as modified during the JCBA process.
  • USAPA and APA will jointly bargain with management to develop the MOU & Merger Transition Agreement (MTA) into a joint agreement that will apply to all pilots for the life of the agreement (Dec 31, 2018)

• MOU establishes interim flying protections

•  
  • All existing AA aircraft, including orders and options, will be flown by current APA pilots.
  • All existing US aircraft, including orders and options, will be flown by current USAPA pilots.
  • Shuttle operations (BOS-LGA-DCA) will be flown by current USAPA pilots.
  • Existing PHX-Hawaii flying will be flown by current USAPA pilots.
  • All transpacific (Asia) flying will be performed by current APA pilots.
  • Minimum block hour floors are established at US and AA to prevent the new company from disproportionally drawing down either operation at the expense of the other.
  • Minimum widebody Captain and First Officer positions are established for US Airways pilots.

• Pay protection is provided for pilots subject to displacements

• If either US Airways or American Airlines is hiring, furloughed pilots on either side may volunteer to fly for the other operation

• Provisions and procedures are established for a Seniority List Integration process in accordance with McCaskill-Bond (click here).

• Current West short term disability plan is extended for 3 years.

• East pilots with sick leave balances in excess of 1000 hours will be able to retain the amount above 1000, but will not accrue additional sick bank hours

• The $40 million payment from the original MOU will be paid to pilots as of the Effective Date.

• The current East life insurance and survivor benefit plans are extended for 5 years.

• The current West life insurance plan is extended for 5 years

Our pilot group has been without a reasonable contract for far too long. We are confident that the resulting document offers our pilots substantial progress towards industry standard pay and working conditions that we have long deserved. We feel it benefits all pilots, no matter where you are on the seniority list. Those with not much time left prior to retirement will be able to increase their retirement savings with higher DC contributions accompanied by higher pay rates. Those with more time left will see substantial pay increases throughout the life of the contract, to better provide for themselves and their families.

If this merger transpires, we believe this MOU is the quickest and surest path to a better lifestyle for us all. We ask you to consider this MOU and associated contract in light of the alternatives. Study the materials you have available, attend the Road Shows and get answers to your questions – then make your decision based on what you believe to be the best choice for you, your family and your career.

We once again thank you for your support and understanding during this long process. We hope that you will join us in believing that it was worth it.

American reminds pilots the MOU will only go into effect if a merger occurs

With details of the memorandum of understanding between American Airlines and US Airways and its pilots union being released on Tuesday, the Fort Worth-based carrier reminded pilots that the MOU only goes into effect if a merger occurs.

Here's the full statement from American spokesman Bruce Hicks about the MOU details.

"The Memorandum of Understanding with the pilots' unions and the companies is based on American’s new Collective Bargaining Agreement with the Allied Pilots Association, and it makes adjustments to accommodate the economics of the Conditional Labor Agreement APA reached with US Airways last year.

"The MOU was negotiated to give the parties greater clarity on both the costs and the pilot integration processes associated with a potential merger, as American reviews its strategic alternatives. It defines the terms and conditions of employment for American and US Airways pilots in the event of a merger and the process to reach a Joint Collective Bargaining Agreement. The MOU also specifies the process to develop a combined seniority list within two years of a merger, and it establishes certain protections around the flying that would be performed by pilots at each airline until a Joint Collective bargaining Agreement is established.

"The terms of the MOU currently are not effective, and only become effective in the event a merger is approved and consummated."

-Andrea Ahles

Details of the MOU for the pilots unions at American and US Airways are released

The Allied Pilots Association released key details of the memorandum of understanding that it approved in late December.

Among the highlights includes an additional $522 million in contractual improvements over the six-year term of the pilots' contract. The money will likely come in the form of pension, pay or per diem rates and translates to about $87 million per year of the contract. The half a billion dollars is in exchange for no profit sharing.

The MOU also decreases the amount of domestic code-sharing. In the APA contract approved in December, the pilots agreed to allow American to have up to 50 percent of its domestic flying in code-share agreements. The MOU caps domestic code sharing at 15 percent. American had asked pilots for expanded codesharing so it could increase its agreements with other carriers like JetBlue, to help it gain market share on the East Coast. Since US Airways already has a strong presence on the East Coast, it is likely that a merged carrier would not need expanded code sharing agreements.

Keep reading for the full letter from the APA Negotiating Committee.

-Andrea Ahles

 

Negotiating Committee Overview of the MOU

In December, APA participated in negotiations to develop a memorandum of understanding (MOU) addressing issues related to a potential merger inside bankruptcy. The talks were facilitated by the Unsecured Creditors’ Committee and included senior management from US Airways and AMR, as well as negotiators from the US Airlines Pilots Association (USAPA). We worked very closely with the USAPA Negotiating Committee throughout this process. The APA Board of Directors voted on Dec. 29 to approve the MOU by a vote of 11-5. The USAPA Board of Pilot Representatives approved the MOU on Jan. 4 by a vote of 11-0.

To view the MOU, click here.

To view questions and answers regarding the MOU process, click here.

Key Components of the MOU

• The document replaces the conditional labor agreement (CLA) negotiated with US Airways management in April 2012 and serves as a Merger Transition Agreement.
• The MOU starts with the APA 2012 Collective Bargaining Agreement (CBA) as the baseline contract for all pilots, and allows APA to make $522 million in contractual improvements ($87 million per year over six years).
• USAPA pilots will be covered under the modified APA 2012 CBA on the Effective Date, which will be the date the Plan of Reorganization is approved by the bankruptcy court.
• A timeline is established for negotiating a Joint Collective Bargaining Agreement (JCBA) with USAPA participation until such time as one union is certified by the National Mediation Board (NMB) to be the collective bargaining representative of the combined pilot craft or class, at which time the duly-certified representative shall have the exclusive authority to negotiate the JCBA on behalf of the pilots.
• For USAPA, the JBCA will be a new contract. For APA, the JCBA will be an amendment to our current contract.

To view the timeline established by the MOU, click here.

• APA must file a single-carrier petition with the NMB within four months of the Effective Date of the MOU.
• Provisions and procedures are established for a Seniority List Integration process in accordance with McCaskill-Bond.
• The MOU provides initial flying protections until fence provisions are established as part of the Seniority List Integration process.

All existing AA aircraft, including orders and options, will be flown by current APA pilots.

All existing US aircraft, including orders and options, will be flown by current USAPA pilots.

US Airways pilots will fly the first thirty E190 aircraft and starting with the 31^st E190, APA will receive two E190 aircraft for every additional E190 above thirty flown by US Airways pilots.

Shuttle operations (BOS-LGA-DCA) will be flown by current USAPA pilots, along with existing PHX-Hawaii flying.

All transpacific (Asia) flying will be performed by current APA pilots.

• Minimum block hour floors are established at US and AA to prevent the new company from drawing down either operation at the expense of the other. Pay protection is provided for pilots subject to displacements (subject to contract modification and valuation phase).
• If either US Airways or American Airlines is hiring, furloughed pilots on either side may volunteer to fly for the other operation. Furlough protection will be provided to all pilots at both operations, who are senior to the most junior active pilot on the Effective Date.
• Carried over from the Conditional Labor Agreement are provisions that transition our vacation accruals and daily values to the America West structure (daily value of 3:40), as well as the provision that flights over 16:00 hours will be manned by two captains and two first officers. Similar to the CLA, the MOU has no provision for profit-sharing.
• The APA 2012 CBA Section 1 will preserve the limit for regional feed aircraft of 76 seats and 86,000 lbs and will grandfather seventy-six aircraft which are below 86,000 lbs but currently flying with more than 76 seats. Total regional operations will be limited to 75% of the mainline narrow-body fleet count and large regional aircraft (66-76 seats plus grandfathered) will be limited to 40% of the mainline narrow-body fleet count in 2016 and thereafter. Domestic code-sharing will be limited to 15% (down from 50% in our current contract). The international baseline will be updated to include international hours flown by US Airways.
• The MOU also requires the new company to uphold the arbitration decision outlined in LOA 12-05 that will address the elimination of Supplement CC and the drawdown of the STL pilot base.

Contract Modifications

As mentioned previously, the MOU gives APA $522 million to spend on contractual improvements, subject to a valuation phase and arbitration (if required). On Thursday, Jan. 3, 2013, the APA Board directed the Negotiating Committee to make specific contractual modifications to our 2012 CBA during the valuation phase outlined in the MOU. Since these modifications have not been mutually agreed to, we will communicate them in a separate message in the near future.

This MOU negotiation is just one milestone in this process and will require approval of the two corporate boards of directors as well as the approval of the bankruptcy court. It is our goal to provide additional educational materials in the near future in order to answer the many questions you may have associated with the MOU and the potential merger process ahead.

You APA Negotiating Committee