American Airlines Negotiations

APFA Negotiations

• Negotiations Timeline
• Negotiations Updates
• Meeting Calendars
• Negotiations Communications
• Key Tentative Agreements and Proposals
• Key Issues
• Pensions
• Wages/Pay Rates
• Benefits/Health
• Productivity

The updates section provides historical information about scheduled bargaining sessions.

View 2009 Updates   |   View 2008 Updates

May 18-21, 2010
The company and APFA continued mediated negotiations in Washington, D.C., this week, with Senior Mediator Pat Sims. Throughout the course of the week, the teams exchanged comprehensive proposals, working to close the gaps on the remaining open items.

 

The company’s proposal significantly moved toward APFA in several areas including compensation, hours of service and healthcare. While it is true we have asked for improvements in productivity and healthcare contributions that are more in line with the industry, our proposal provides opportunities for our flight attendants to make more money. In fact, with our proposed changes, any flight attendant who flies their schedule would receive greater take-home pay than they do today.

 

While the teams did not reach an agreement during this session, the company remains steadfastly focused on negotiations, presenting thoughtful proposals to help us become more competitive and coming to agreement on the items important to our flight attendants and the company. We continue to believe that a negotiated agreement is the best outcome for everyone – our employees, our company and those who depend on us every day. We are awaiting next steps from the NMB. Click here to read the company’s latest comprehensive proposal.

 

Since its last proposal, the company shortened the duration of the contract from eight years to five years in order to meet APFA’s interests.

 

Key areas of the company’s latest table position are as follows (the company’s key moves are highlighted below):

Article 3 – Compensation

 

Pay Rates: The company’s proposal increases flight attendant pay, providing structural increases each of the five years of the contract. The company previously proposed structural increases with a lump sum and industry average increases. The current proposal offers:

• Signing Bonus –  3% previous calendar year earnings (non pensionable)
• Date of signing (DOS) –  2% structural
• DOS + 12 months –  2% structural
• DOS + 24 months –  2% structural
• DOS + 36 months –  2% structural
• DOS + 48 months –  1.5% structural

Purser Pay: The company’s  proposal remains unchanged. It continues to increase:

• Domestic wide-body to $2.50 / hour
• International narrow-body to $2.50 / hour
• International wide-body to $4.00 / hour

 

Galley Pay: The company’s  proposal remains unchanged. It continues to:

• Eliminate Domestic Coach galley pay
• Create 757 IFS First Class galley position pay: $.88 / hour

 

Profit Sharing: The company’s proposal remains unchanged. It continues to propose to replace the existing profit sharing plan with a new profit sharing plan that rewards employees at the first dollar earned and matches Continental’s plan – the richest plan in the industry. The company’s proposed plan:

• Creates an award pool of 15 percent of all operating earnings. This percentage would establish a fund from which awards are distributed to all participating employee groups.

Customer Incentive Plan: The company’s proposal remains unchanged. It continues to:

• Create customer service incentive up to $100 per month (paid monthly, quarterly, semi-annually or annually at the company’s discretion) for achieving designated customer service targets as designated by the company on an annual basis.

 

AIP Plan: The company proposal remains unchanged. It continues to:

• Eliminate the financial and customer service components of the AIP Plan.

Article 4 – Expenses: The company proposed to increase the per diem at DOS to match the current pilot per diem.

• Increase per diem at DOS to $1.80 Dom / $2.00 Intl

Article 6 – Vacation: The company’s proposal remains unchanged.

• The company continues to propose a vacation plan that would give flight attendants the opportunity to accrue additional vacation days based on the number of paid hours, using the minimum annual threshold of 540 hours. No flight attendant, who meets the annual threshold, would accrue fewer vacation days than they do today.

Annual Vacation Accrual	Less than 540 paid hours	Current Accrual	540 – 739  paid hours	740 – 939 paid hours	940 or more paid hours
0-5 years	0	9	9	10	11
5-12 years	0	14	14	15	17
12-20 years	0	19	19	21	23
20-25 years	0	23	23	25	28
25+ years	0	28	28	30	35

Must maintain an average of 45:00 hours per active month.

 

• Limit PVDs to six at a 3:30 hour daily rate as well as give flight attendants the option to sell back up to one or two weeks of vacation at a 3:30 hour daily rate.
• Increase the value of a vacation day to 3:30 hours per day for each day a domestic or international flight attendant elects to convert to their 401(k).

Article 7 – Hours of Service: The company decreased its previously proposed monthly schedule maximum to 89 hours domestically and internationally in order to move closer to APFA’s proposal. This max would be phased in after the first year of the contract. American’s current contract limits our monthly scheduling of flight attendants to no more than 77 hours domestically and 82 hours internationally.

• DOS – 80:00 Dom / 85:00 Intl              
  • Pure bids to 84:00 Dom / 89:00 Intl.
  • Exception: Three India / China sequences per bid line are acceptable.
  • Redefine pure bids as: Sequences with the same number of legs (not to exceed 12 International), and home based departures variance no greater than four hours.
  • A “No Option” flight attendant will not be involuntarily reassigned above schedule max.
  • An “Option” flight attendant will not be involuntarily reassigned more than five hours above the schedule max
• DOS + 12 months – 89:00 Dom / 89:00 Intl.
  • 5% of lines can be built to 92:00 Dom / 92:00 Intl (without restrictions).
  • 15% of lines can be pure bid and built to 92:00 Dom / 92:00 Intl.
  • Exception: Three India / China sequences per bid line are acceptable.
  • A “No Option” flight attendant will not be involuntarily reassigned above schedule max.
  • An “Option” flight attendant will not be involuntarily reassigned more than five hours above the schedule max

Article 9 – Scheduling: A key enhancement is found in sequence pay protection.

• The company’s sequence pay protection proposal includes:
  • Sequence pay protection up to the schedule max (including carryover time, excluding trips removed due to monthly overlap conflicts, trips voluntarily dropped and OE trips).
  • Must bid or be assigned a trip that originates within DOSTF unless assigned comparable days later in the month.
  • Flight attendant may bid or be assigned multiple sequences originating within DOSTF.
  • If protected for turn-around, a flight attendant may be assigned airport stand-by duty. Stand-by assignments must be in open time at time of bidding.
  • Sequence pay protection does not apply to reserves.
  Other proposal items include:
• Combining Domestic / International operations for all flight attendants at DOS + 48 at the company’s discretion. (See attachment titled Dual Qualified LOA Proposal 5/21/10)
• The parties would agree to create a joint committee to explore alternative line construction and bidding systems.
• Establishing a schedule enhancement period (SEP) for flight attendants, which would allow them to make changes to their schedule prior to the beginning of the contractual month (details to be determined).
• Creating automated daily bidding and assignment process for trips departing the following day.
• Permitting involuntarily low flight attendants the first opportunity to access and be assigned open time.

 

Article 26 – Sick Leave: Similar to our vacation proposal – the company continues to propose a sick plan that would give flight attendants the opportunity to accrue additional sick hours based on the number of paid hours, using the minimum annual threshold of 540 hours. No flight attendant, who meets the annual threshold, would accrue less sick hours than they do today.

Must maintain an average of 45:00 hours per active month.

 

• Offer the option for flight attendants to receive an annual payout of 50 percent of their yearly sick accrual, net of any usage, at 50 percent of the hourly base rate of pay.
• Implement sick clearance at noon.

Article 35 – Group Life and Health Benefit Plan

Active Medical: The company moved significantly closer to APFA’s latest proposed active healthcare contributions. We also met their desire to keep a three-tier plan structure (EE+0, EE+1, EE+2). Employee contributions for the active standard medical plan shall be amended to the following:

Employee Monthly Contributions for the $300 deductible contractual option

• The company has committed to offer flight attendants a free health plan that is compatible with a health savings account. The employee monthly contributions for the PPO with Health Savings Account (HSA) shall be zero through 2015.

• The four standard contractual options will be condensed to two: a $300 deductible plan and a free health plan that is compatible with a health savings account. The free plan shall be the same PPO with HSA that is offered to management and support staff employees during the contract period, and is guaranteed to remain compatible with the IRS regulations regarding health savings accounts. Both plans include free preventive care, under the same preventive guidelines used for the Point of Service option. The plan design for the $300 deductible plan and PPO with H S A is as follows:

	Free Option	Contractual Option
2011 Plan Design (APFA)	PPO w/H S A**	$300 Deductible
In Network Deductible (Single/Family)	$1,500/$3,000	$300/$800
Out of Network Deductible (Single/Family)	$3,000/$6,000	$600$1,600
Coinsurance (In/Out)	20%/40%	20%/40%
In Network Out of Pocket Max (Single/Family)	$4,000/$8,000	$2,000/$3,250
Out of Network Out of Pocket Max (Single/Family)	$8,000/$16,000	Unlimited
PCP/Specialist Copay	20%	20%
Retail Clinics Copay	20%	20%
Preventative Care Office Visit Only*	0%	0%
Pharmacy**
Retail
Generic	subject to deductibles and coinsurance***	subject to deductibles and coinsurance***
Formulary Brand***
Non-Formulary Brand
Mail-order
Generic		$25* per prescription or actual cost if less
Formulary Brand***
Non-Formulary Brand***

______________________________________________________________________________

* Not subject to deductible, copays do not apply to deductible. Does apply to OOP.

** Preventive Rx in PPO w/H S A for in-network only not subject to deductible, coinsurance still applies.

*** If Generic is available, members pays 20% + cost difference.

** PPO w/H S A: each tier the deductible is an aggregate that needs to be satisfied in total before coinsurance applies up to the Out-of-Pocket Maximum.

** PPO w/H S A: each tier the Out-of-Pocket Maximum is an aggregate that needs to be satisfied in total before receiving 100% coverage.

Retiree Medical: American’s proposal guarantees access to retiree medical coverage, regardless of employee health status – both before and after age 65 – but modifies the funding of those programs to better align American with the industry and corporate America.

 

Current Retirees

• No contribution changes for existing retirees (people retired by 12/31/2010). Flight attendants who advise the company no later than 12/31/2010 of their intent to retire will do so with current retiree medical benefits. Current retiree medical terms and conditions remain unchanged. The actual separation date will be determined by the company based on operational needs.

Current Employees

• The company would refund flight attendant prefunding balances, averaging approximately $1,000 per flight attendant.
• The company’s prefunding contributions for retiree medical would stop at contract date of signing.

Pre-65 Retiree Plan: The company enhanced its latest proposal to offer those retiring before age 60 to pay for retiree medical at active healthcare rates. It also proposed a sick bank trade option for those retiring after age 60.

• Flight attendants who retire before Age 60 would pay premiums for Pre-65 retiree healthcare coverage at time of retirement at the same contribution rate as active flight attendant contributions for the active medical contractual option.
• Flight attendants who retire on or after Age 60 will be eligible to use remaining sick bank hours to pay premiums for the Pre-65 retiree medical coverage for the retiree and eligible family members. Twelve sick hours will provide one month of retiree medical coverage for the retiree standard medical option and six sick hours provide one month of retiree medical coverage for the PPO with Health Savings Account (a high deductible medical plan option). Should the flight attendant have insufficient hours to pay for retiree medical coverage to age 65, the flight attendant will be eligible to continue retiree healthcare coverage at the post-funded contribution rate for retiree and eligible family members paid by retired management.
• The company will evaluate the sick hour to medical cost ratio every three years and adjust the sick hours required for one month of medical coverage in accordance for future retirements. 
• A flight attendant who turns age 65 prior to spouse may use remaining sick hours to provide continuing retiree medical coverage for spouse/domestic partner until the spouse/domestic partner turns age 65 or sick hours are exhausted, whichever comes first. Spouse/domestic partner will be allowed to continue retiree healthcare coverage at the post-funded contribution rate until the spouse reaches age 65, as it may be amended from time to time.
• Surviving spouse/domestic partner eligibility will be in accordance with the Plan provisions, which may be amended from time to time.

Age 65 and Over Retiree Plan

• At age 65, retirees would receive access to a series of Medicare supplement plans offered by United Healthcare. The plans would be “guaranteed issue,” meaning that any retiree would be eligible, regardless of medical history or condition. The retiree would pay 100 percent of the premiums for the Medicare supplement coverage.
• Retirees would also have the ability to select and purchase Medicare supplement coverage from other insurance providers. American has chosen to partner with UnitedHealthcare, in part, because they offer personalized education, a dedicated team of retirement specialists and dedicated phone and online support specifically for American retirees.
• For 2010, the national average monthly payment for Medicare supplement coverage ranges from $81 to $183 per person depending on the plan and coverage level selected.
• The options provided through the UnitedHealthcare Medicare supplement plans would provide more choices, flexibility and coverage than under the current Post-65 American Airlines plan. For example, the current plan has a $50,000 lifetime maximum and maximum reimbursement value of up to 80 percent for claims.
• In contrast, the new retiree paid Medicare supplement plans provided by UnitedHealthcare offer no lifetime maximum and opportunity for up to 100 percent reimbursement on claims. Spouses would also have the ability to choose different plans.

New Hires

• Pre-65 Retiree Plan: Employees would no longer prefund. Retirees would have access to guaranteed issue retiree medical coverage at their own expense.
• Age 65 and Over Retiree Plan: At age 65, retirees would receive access to a series of Medicare supplement plans, which today are offered by UnitedHealthcare. The plans would be guaranteed issue, and the retiree would pay 100 percent of the premiums for the Medicare supplement coverage.

Article 36 – Retirement Benefit Plans: The company’s proposal remains unchanged.

• The company would provide a defined contribution 401(k) plan for new hires, instead of a defined benefit pension plan.
• New hires would be automatically enrolled at 3 percent in the $uper $aver Plus 401(k) plan. The company would provide a 100 percent match for employee contributions up to 5.5 percent.
• Existing employees would have the option to transition to the 401(k) plan with a 100 percent company match up to 5.5 percent or remain in the defined benefit pension plan. If an existing employee chooses to transition to the 401(k) plan, then the benefits accrued in the defined benefit pension plan would be frozen.

Article 38 – Duration of Agreement: The company shortened the duration of the contract from eight years to five years in order to meet APFA’s interests.

• Five years from date of signing (July 1, 2015).

February 27-March 3, 2010
The last five days of negotiations concluded Wednesday, March 3, as scheduled by the mediator.

 

Demonstrating our willingness to negotiate an agreement in a timely manner, the company presented a comprehensive proposal that significantly moved toward APFA in several areas of the contract, including compensation where the company offered structural increases.

 

As we’ve said all along, the company is willing to be creative in finding solutions that meet the needs of both parties.  We recognize that structural increases are very important to the APFA. In order to offer those increases and other items key to APFA – like sequence pay protection and increased vacation and sick – we’ve proposed an eight-year deal that would help us to balance our costs over the long term.

 

APFA’s current proposal would cost the company hundreds of millions of dollars over the life of their proposed six and a half - year contract, which would keep our labor costs at an uncompetitive level in relation to other carriers. This is an economic reality the company has asked APFA to recognize so both sides can work out an agreement that will allow the airline to compete successfully and provide competitive pay and benefits and a good career for its employees.

 

The parties are awaiting next steps from the mediator, and look forward to continuing to bargain when the mediator establishes the next set of dates.

 

New elements that the company proffered in its latest proposal are detailed below (more explanation around each of these elements will be included in the next edition of “Flight Attendant Negotiations News”). For the full proposal, click here.

 

Article 3 – Compensation (Modify)
In consideration of a long-term (8 year) agreement, the Company is willing to propose structural increases as indicated below:

• Signing Bonus – 3% previous calendar year earnings (non pensionable)
• DOS + 8 months – 2% structural – applicable to steps 6 through 15 only
• DOS + 12 months – 2% structural – applicable to steps 7 through 15 only
• DOS + 24 months – 2% structural – applicable to steps 8 through 15 only
• DOS + 36 months – 2% lump sum
• DOS + 48 months – Industry average increase*
• DOS + 60 months – Industry average increase*
• DOS + 72 months – Industry average increase*
• DOS + 84 months – Industry average increase*

*Industry average increase shall be defined as the average increase year over year in the flight attendant domestic pay rates in each longevity step in the agreements of Delta, Continental, United, US Airways, Air Tran and Southwest

 

Article 4 – Expenses

• (Withdraw) Eliminate TAFB for Turns (as proposed on 7/24/09)
• (Modify) Increase Per Diem:
• DOS – $1.55 Dom / $1.80 Intl
• DOS + 12 months – $1.65 Dom / $1.90 Intl
• DOS + 24 months – $1.80 Dom / $2.00 Intl

Article 6 – Vacation

• (Modify) Limit PVDs to six (6) at 3:30 hour daily rate
• (Modify) Sliding Scale increase accrual based on the following:

                 

Annual Vacation Accrual	Less than 540 paid hours	540 – 739  paid hours (Current Accrual)	740 – 939 paid hours	940 or more paid hours
0-5 years	0	9	10	11
5-12 years	0	14	15	17
12-20 years	0	19	21	23
20-25 years	0	23	25	28
25+ years	0	28	30	35

*Must maintain an average of 45:00 hours per active month

• (Modify) Option to sell back one (1) or two (2) weeks of vacation at 3:30 hour daily rate (FA must choose this option during annual bidding period)
• (Modify) Increase value of 401(k) converted vacation to 3:30 hours/day for Domestic and International

Article 7 – Hours of Service

•  (Modify) Schedule Monthly Max
• DOS – 80:00 Dom / 85:00 Intl    
• (New) 25% of lines can be pure bids built to 85 Dom / 90 Intl
• Exception: Three (3) India / China sequences per bid line is acceptable
• (Withdraw) Eliminate Pure Bid Restrictions – The Company will attempt to maintain purity in the lines as operationally feasible
• (New) Redefine pure bids as: Sequences with the same number of legs (not to exceed 12 International), and home based departures variance no greater than four (4) hours
• A “No Option” Flight Attendant will not be involuntarily reassigned above schedule max
• An “Option” Flight Attendant will not be involuntarily reassigned more than five (5) hours above the schedule max
• DOS + 12 months – 85:00 Dom / 87:00 Intl
• (New) 25% of lines can be pure bids built to 90 Dom / 92 Intl
• Exception: Three (3) India / China sequences per bid line is acceptable
• (New) Redefine pure bids as: Sequences with the same number of legs (not to exceed 12 International), and home based departures variance no greater than four (4) hours
• A “No Option” Flight Attendant will not be involuntarily reassigned above schedule max
• An “Option” Flight Attendant will not be involuntarily reassigned more than five (5) hours above the schedule max
• (New) DOS + 24 months – 89:00 Dom / 89:00 Intl

• (New) 25% of the lines can be pure bids built to 95
• Exception: Three (3) India / China sequences per bid line is acceptable
• (New) Redefine pure bids as: Sequences with the same number of legs (not to exceed 12 International), and home based departures variance no greater than four (4) hours
• A “No Option” Flight Attendant will not be involuntarily reassigned above schedule max
• An “Option” Flight Attendant will not be involuntarily reassigned more than five (5) hours above the schedule max
• (New) DOS + 48 – 92:30 Dom / 92:30 Intl
• (New) 25% of the lines can be pure bids built to 95
• Exception: Three (3) India / China sequences per bid line is acceptable
• A “No Option” Flight Attendant will not be involuntarily reassigned above schedule max
• An “Option” Flight Attendant will not be involuntarily reassigned more than five (5) hours above the schedule max
• (Modify) Create daily rate of 3:30 hours for PVDs

 

Article 9 – Scheduling

• (Modify) Combine Domestic / International operations for all Flight Attendants at DOS + 48 at the Company’s discretion
• (Modify) Withdraw bid line protection (as proposed on 1/20/10)
• (New) Create sequence pay protection
• Sequence pay protection up to the schedule max (excluding carryover time)
• Company offered “Option II” flying will be sequence protected above the schedule max
• Must bid or be assigned a trip that originates within days originally scheduled to fly (DOSTF) unless assigned comparable days later in the month
• Flight Attendant may bid or be assigned multiple sequences within DOSTF
• If protected for turn-around, Flight Attendant may be assigned airport stand-by duty. Stand by assignment must be in open time at time of bidding
• Sequence pay protection does not apply to Reserves
• Eliminate 9.P.6.
• All other Article 9.P. rules will apply
• (New) The parties agree to create a joint committee to explore alternative line construction and bidding systems

 

Article 10 – Reserve

• (Modify) Reduced days of Reserve Availability – percentages determined by the Company

Article 26 – Sick Leave

• (New) Sliding Scale increase accrual based on the following:

Annual Paid Hour Threshold	Less than 540 paid hours	540 – 739  paid hours	740 – 939 paid hours	940 or more paid hours
Accrual hours per active month	0	3:00 hours	3:30 hours	4:00 hours

*Must maintain an average of 45:00 hours per active month

Article 38 – Duration

• (Modify) Duration of agreement – eight (8) years from date of signing (May 1, 2018)
• (Modify) Establish an amendable round of negotiations commencing six (6) months prior to May 1, 2014
• Absent an agreement during the six (6) month negotiation period, each party may submit to binding interest arbitration up to five (5) discrete contract proposals (excluding compensation) on which they have been unable to reach agreement during the amendable round

January 16-21, 2010
This week, the American and APFA negotiating teams met with Senior Mediator Zachery Jones to continue their discussions.

 

Over the course of the two-week period, the American team presented APFA with two comprehensive counterproposals, and APFA presented the company with two comprehensive counterproposals. The teams worked hard, and American remains committed to reaching an agreement that recognizes flight attendants’ service and dedication while positioning the company for long-term success. The company’s proposals aim to increase flight attendants’ earnings and enhance their quality work-life, while at the same time, improving productivity and therefore the cost position of the company. Currently, American has among the highest labor costs in the industry, with our flight attendants being one of the highest compensated. We must bring these costs in line with the competition in order to continue to provide good jobs with good pay and benefits.

 

While the teams did not reach an agreement during this time, the company stays committed to the process, and we are ready to move ahead with any proposal that makes good economic and operational sense. We look forward to resuming mediated discussions with APFA February 27 – March 3 in Washington, D.C.

To read the company's latest comprehensive proposal, click here.

January 11-15, 2010
This week, the American and APFA negotiating teams met with Senior Mediator Zachery Jones in Frisco, Texas. On Friday afternoon, the company presented APFA with a comprehensive proposal which covers open areas of the contract, including a counterproposal on Article 3 – Compensation. American remains committed to working with APFA to reach a contract that recognizes the contributions of our flight attendants while allowing the company to be competitive and provide for long-term success.

The teams will continue meeting with the mediator this weekend and through next week.