The updates section provides historical information about scheduled bargaining sessions.
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Negotiations with the APA were held Monday afternoon through Thursday morning the week of August 31 under the guidance of Mediator Mike Tosi. Discussions began by following up on items from the previous negotiating session, including Co-Terminals, Tulsa Scope of Work, Mid-Sequence Fatigue and various Letters of Agreement. The APA also shared a proposal on various Scheduling-related issues including the Filling of Open Time.
On Tuesday morning, the company focused on Benefits-related issues such as Active and Retiree Medical and Long-Term Disability. The company gave a brief industry update of healthcare costs in an effort to engage union negotiators, and presented an updated Medical Benefits proposal. Medical costs in virtually every sector have skyrocketed; American and the airline industry are not immune. In fact, AA’s medical costs are above both airline and large company averages. In order to continue providing affordable healthcare coverage for our employees, we must make sure our long-term costs are sustainable. Under the proposal, the company would cover 75 percent of health insurance costs, while employee contribution levels would become comparable to other airlines’ and large companies. This is similar to what has been proposed to both the TWU and APFA, and in line with what is currently in place for all management employees.
That afternoon, AA negotiators presented a revised Retirement Benefits proposal. Under the amended proposal, a pilot would have the option to have all B Plan assets distributed directly to him/her and invest those funds in any vehicle of his/her choice. The company’s previous B Plan proposal maintained AA’s 11 percent contribution commitment, but proposed converting the B Plan to individual 401(k) plans. AA’s revised proposal builds on this, continuing the company’s commitment to contribute 11 percent while offering pilots additional flexibility in how they would like to utilize their retirement funds.
Wednesday’s discussions continued on the line-building process and Tulsa Scope of Work. After exploring the APA’s Scheduling proposal, company subject matter experts were able to show that building 78-hour lines within the constraints of the union’s proposal was difficult and often yielded little to no results. In essence, the company has very little to work with under the union’s current proposal. Still, both sides were able to engage in some productive conversation and AA negotiators are committed to working on this for the next bargaining session.
Parties also continued their discussions on how to adjust the pilot Credit Plan Account so that it complies with new Federal tax laws and pilots can avoid new potential tax liabilities. We have exchanged a number of proposals with APA on this issue and believe we are close to a resolution, with both sides recognizing that the long-term solution will likely be dealt with in Section 6 negotiations at a later date.
Thursday’s talks concluded with further discussion on both sides’ proposals on lock-ins.
The next negotiating session is scheduled for September 29th in Washington, D.C.
Mediated negotiations with the APA resumed this week in Orlando, Florida. On Monday, the APA presented the company with a comprehensive scheduling proposal. While AA’s negotiators hoped for meaningful discussions on pilot scheduling, they were disappointed to see that the union's proposal was virtually unchanged from its last position. After a thorough review of the proposal with APA, union negotiators conceded that there were no substantial movements.
The company hoped to have productive discussions concerning Scope, something that we understand is an important and sensitive issue for all pilots, during Tuesday’s session. At the mediator’s request, the AA negotiating team explained the importance of code shares and commuter feed to our business and the logic behind our most recent Scope proposal. APA negotiators refused to recognize that competitive Scope provisions had any benefits to the health of the airline or pilot jobs and maintained that the current economy and increasingly global state of the aviation industry has no bearing on APA’s desire to prohibit all future Scope exceptions.
AA negotiators reiterated that it’s the company’s desire to see AA pilots fly AA metal on every flight we operate whenever possible, but it must make both economic and regulatory sense. We simply cannot operate routes that lose significant amounts of money – and endanger every employee’s livelihood – or which we do not have the legal authority to fly. On the other hand, every incremental passenger that is fed to one of our flights by a carrier that can legally or profitably fly the route helps all of us. As we have told the APA several times, the company is willing and wanting to discuss any option the union can offer that would allow us to operate these flights with AA pilots on a cost-effective basis. To date, the union has been unable to present any scenario in which that is achieved.
Wednesday’s session included the company’s response to APA’s scheduling proposal focusing on the issue of filling of open time. The parties also established the agenda for the next mediated sessions, currently scheduled for August 31 in Dallas.
Company and union negotiators resumed mediated negotiations last week in Baltimore, Maryland.
On Tuesday, the company presented counterproposals on Section 21 – Discipline, Grievances, Hearings and Appeals; Section 22 – Pre-Arbitration Conference; Section 23 – System Board of Adjustment; Training/Miscellaneous Flying; Hotels; Moving Expenses; and Sick Leave. The company also proposed a Furlough Protection clause to the contract, ensuring that no pilot would be furloughed as a result of any productivity gained through changes produced in Section 6 negotiations. The APA rejected this offer.
Also that day, AA negotiators presented a proposal to modify the pilot Credit Plan Account (CPA) bank. Due to a federal tax law change, the Company believes income in pilots' CPA banks will now be taxed as deferred compensation and subject to an additional 20 percent penalty tax as well as interest. In an effort to avoid this, the company proposed in August 2008 to have all funds in a pilot’s CPA bank at the end of each calendar year paid out by March 15 of the following year. This way, pilots would be fairly compensated and avoid new taxation, interest and penalties. APA rejected this. In October 2008, the company proposed eliminating the CPA bank and allowing pilots to be paid out at the time when the flying is done instead of “banking” the hours and having them incur the new tax penalty. The APA rejected this as well. The union’s original proposal was for the company to assume all personal taxes that pilots will incur from the federal tax law change. Because the company believes this issue needs to be resolved by the end of 2009 in order to prevent pilots from assuming new tax burdens and penalties, APA finally agreed that attorneys from both sides should discuss the 409A tax penalty implications. APA will submit questions to AA’s tax experts during this time.
APA responded to company proposals presented during the last mediated session on Lock-ins; Tulsa M&E Flying; Leaves of Absence; and Co-Terminals. The union also presented proposals on Failure to Qualify; Staff Pass Travel; Union Travel; Probation; and Parking Permits.
On Wednesday AA presented counterproposals on Failure to Qualify; Letters of Agreement; Co-Terminals; Parking Permits; Civil Reserve Air Fleet (CRAF) flying; Supplement Z – Terrorism Benefits; Lock-ins; Probation; APA Staff Pass Travel; and Union Travel. The APA presented proposals on Sick Leave; Moving Expenses; Hotels; Computer Stipend; CRAF flying; Supplement Z; Sections 21, 22 and 23; and Letters of Agreement.
Negotiations concluded on Thursday, when the company presented a proposal on Section 22 (enhanced Pre-Arbitration Conference) and the APA presented a proposal on Parking Permits.
While the company hoped the APA would be more willing to clear administrative items off the table, limited progress was made. The parties signed a Tentative Agreement on Section 17.P – Failure to Qualify and, subject to contract language, reached agreement on Co-Terminal and Satellite Base flying. Some progress was also made in areas of Sections 22 and 23, Leaves of Absence and Parking Permits. The parties agreed to meet outside of Section 6 negotiations to summarize areas of agreement and issues still outstanding on Sections 21, 22 and 23. A verbal tentative agreement was reached on Section 22, depending on the outcome of the subcommittee discussions.
The next mediated sessions are scheduled for the week of July 20.
Based on the high level of interest in our Scope discussions, the company has posted a recent presentation it provided to APA negotiators and Mediator Tosi. The presentation demonstrates the importance of commuter feed in building and supporting a competitive and flexible network. Additional details of the week’s discussions can be found below in the May 8 update.
Negotiations with the APA resumed this week in Dallas/Fort Worth. The company presented the union with a mini-package of six items – Leaves of Absence, Lock-ins, Co-terminals/Satellite bases, Tulsa M&E Flying and Reserve, Civil Reserve Air Fleet (CRAF) Flying and Supplement Z – Terrorism – in an effort to address some of the issues and pilot needs that APA voiced are important to their membership. Later in the day, AA negotiators presented proposals on Section 22 – Pre-Arbitration Conference and Section 23 – System Board of Adjustment. The company also provided the Mediator and union negotiators with a brief update on AA and industry financials.
On Wednesday, company negotiators shared a presentation that emphasized the importance of commuter feed to the AA business and the contract’s Scope Clause. APA negotiators responded that thousands of AA pilot jobs have been lost due to the Scope exceptions they have granted the company in the past. This logic misses the mark. The flights we operate with commuter carriers are routes that are economically unfeasible for AA to fly. In fact, customers brought to our network by regional carriers actually support AA jobs rather than cost them. In 2008 alone, the 9.3 million passengers that came to AA via Eagle translates to 83,000 MD80 flights for AA pilots. These connecting passengers support about 10 percent of the total departures AA pilots make each year. That misunderstanding by the APA is similar to an apparent misunderstanding on their part of the importance to the overall network of international codesharing. We do not codeshare on international routes other than in compliance with Section 1.J. of the Scope Clause. That codesharing, too, actually saves rather than eliminates AA jobs.
Discussions Wednesday afternoon focused on vacation bidding and scheduling. APA negotiators presented a counterproposal on pilot training. The company was surprised that APA rejected the concept of distance learning, something AA negotiators believe is of mutual benefit to the company and its pilots.
Thursday’s session included updates on the scheduling subcommittee’s progress, fatigue policy and the potential use of new technology for company/crew communications. APA also presented counterproposals on Sections 22 and 23 and a counterproposal to the company’s Sick proposal made during last month’s negotiating session.
The company will thoughtfully review each proposal and respond at the next mediated session, currently scheduled for June in Baltimore, Maryland. Mediator Tosi indicated that the agenda will focus on a large number of miscellaneous items. AA hopes that union negotiators will be willing to discuss mutually-agreeable solutions to these topics so that we can get them cleared off the table and focus our attention on the more complex issues facing us.
While the company is disappointed that bargaining time was lost on Wednesday, talks were able to resume Thursday morning. Over the course of the week, AA negotiators worked to address all agenda items and presented counterproposals on several issues.
Following the company’s brief financial presentation on Tuesday morning, AA negotiators shared the full year 2008 losses to the Pilot B Plan retirement fund. Under today’s system, company contributions are deposited into a common fund from which pilot retirement monies are drawn. With fluctuations in the economy and the B Plan's available "lock in" feature, something the company has proposed eliminating, pilot retirement activity has the potential to financially affect each remaining participant in the B Plan. In 2008, for example, the high number of pilot retirements negatively affected all B Plan participants by over $101 million. On average, each remaining pilot in the B Plan lost about $9,000 in the value of his or her B Plan units. Pilots can estimate just how much money was lost from their B Plan funds in 2008 due to this “lock in” provision using our Pilot B Plan Calculator.
Tuesday afternoon, negotiators discussed passports/visas; satellite base facilities; Article 17P; and lock-ins. The company also presented a counterproposal on distance learning and the union presented a counterproposal on Sick Leave.
Thursday’s discussions included Tulsa M&E pilots; the paycheck process; leaves of absence; and lock-ins. The company presented counterproposals on Sick Leave, Section 22 – Pre Arbitration Conference and Section 23 – System Board of Adjustment. APA negotiators presented counterproposals on CRAF flying; Supplement Z – Terrorism; Sabotage and Hostage Benefits; Co-terminals; and Sections 22 & 23. The company will carefully review each counterproposal and respond at the next mediated session, currently scheduled for May 5-7 in Dallas/Fort Worth.
At the request of the mediator, negotiations with APA were held this week in Annapolis, MD. Both sides presented proposals on Commuter policy, Grievances and Arbitrations Process, Uniforms and Section 17.O. The Company also delivered counter proposals on Intra-base TDY Vacancy Obligations and Sick Leave. Tentative agreements were reached on Uniforms and Section 17.O Requirement to Qualify in Turn. Both sides also briefly discussed Leaves of Absence and Benefits issues. Mediated talks are scheduled to resume March 31 – April 2 in Dallas.
January 30, 2009
Negotiating committees met this week in Philadelphia, PA, at the request of the Mediator. The two sides covered a number of topics and by week’s end, were able to clear two items off the table, agreeing in principle to Letter K, Uniforms and extending another Letter of Agreement on Section 17.O (Qualify in Turn). Also this week, Mediator Tosi asked for a subcommittee report on Section 22 issues. The Company provided the information as requested, but the APA requested deferral on these topics until the next full negotiation session in March. Discussion regarding the remaining agenda items from this week will continue in March with the APA indicating it will review and respond to Company proposals on CRAF, Intra-base TDY vacancy obligations, Failure to Qualify and CPA bank
On Tuesday the APA presented a proposal regarding productivity enhancements and career progression. For the following reasons, the Company is unwilling to accept the APA’s recent proposal regarding pilot career progression:
- The enhanced productivity offered by the APA is a move in the right direction, but it is voluntary and insufficient to address AA’s large productivity gap as compared to its peers.
- It requires that all furloughees be recalled and thousands of pilots upgrade to Captain before giving a minimal improvement to productivity (1.5 hours of voluntary flying).
- Duty rig improvements are permanently locked in while modest productivity enhancements are potentially temporary.
- It does not take into account the economic environment in which we operate.
The Company understands pilot concerns regarding career progression. AA believes the best way to address this issue is to create a healthy, competitive airline that offers opportunities for growth and advancement. To achieve that, the airline must be able to maintain a competitive cost structure, increase productivity in key areas and consistently turn a profit. No airline can offer an iron-clad guarantee against career stagnation – but the Company is very open to discussing pilot concerns if the APA is open to discussions about productivity.
To prepare for the next scheduled bargaining session on March 3rd, the Mediator asked both parties to consider establishing subcommittees on several topics. The Company and APA agreed to create an economic analysis subcommittee to review and discuss information regarding assumptions and pricing models used to analyze proposals. The parties also agreed to reconvene a scheduling subcommittee. Both subcommittees have agreed to meetings in February.
