Q and A from the TWU informational website concerning the AA Bankruptcy

These are the questions that have been added to the TWU informational site concerning the AA Bankruptcy.. since my last emailing of the Q&A, This starts at question 72.

You can always visit the aa.twu.org site for all the detailed information.

Take Care,
Allan Ball
TWU514 IT/Communications
_______________________________

How does our failed T/A compare (wages, benefits, pension, work rules, etc..) to UAL/ IBT TA?

United Recent M&R Agreement / AA Failed May 2010 M&R TA Side – By – Side

Several members have asked how the recently ratified IBT Mechanic and Related Contract at United compares to the May 2010 TWU Mechanic and Related Tentative Agreement that failed to ratify. Below is a side by side comparison summarizing the key contract provisions from the two agreements using AMT pay rates.

PROVISION	United Ratified Dec 2011	American May 2010 TA
Scope / Outsourcing	No changes to current practice – currently ~45% of total MX spend outsourced. Old 20% outsourcing cap language removed from CBA for some restrictions. No additional outsourcing may occur if it would result in furlough of employees. New aircraft maintenance staffing at EWR and PHL.	~10% total spend outsourced including TAESL. Additional EE protections in the event of spinoff of MX facilities or transfer of substantial maintenance assets.
Productivity	New Utility Specialist Craft (position) created and current Mechanic Helpers will merge in to this new classification. Can work on aircraft interiors and GSE equipment and there is no headcount cap. Apprentice Mechanics classification up to 10% of total mechanic and higher classification headcount, can sign for own work if hold A&P, will work for up to 3 years in classification.	Base to a 24/7 hour operation. Create one license OSM (SMA) position limited to Aircraft Overhaul up to 20% of each dock line AMT headcount. Achieved by attrition only.
ASM Restrictions, Job Protection	No regional flying restrictions. Job Protection for all IBT members and at SFO job protection to include all those recalled within 5 years of effective date.	10% CAP with exclusions; move system protection date to 6/6/2000 when all TWU agreements modify ASM cap (~600 AMTs).
Signing Bonus / Lump Sum	$11,500 per EE	6% Base EEs Only (~$4000 for TOS AMT)
Retro Pay	None	Pay and premiums were to be retro to 5/5/2010 from DOS
Structural Increases	17.5% DOS at top rate only. Wage scale extended to 6 years, start rate lowered, average increase ~6.8%. Second year increase 2.5%.	3% DOS, 1.5%, 1.5% (5 year wage scale)
Line AMT Headcount	~1750	~3400
Top AMT Rate (Line): Base+Lic.+line+MRP+shift+longevity	$36.64	$37.10 DOS (May 5, 2011 $37.52)
Base AMT Headcount	~2000	~4950
Max Base Rate AMT DOS (Chart Rate)	From $25.89 to $30.41	From 27.20 to $28.02 DOS (May 5, 2011 $28.44)
Line Premium	From $0.30 to $0.40	From $0.55 to $2.55
A&P license premiums (2)	From $4.06 to $4.25	$5.00
MRP (Midnight retention premium – line only)	None	From $0.50 to $1.50 (Line AMT)
Weekend Premium (base only)	None	$0.50
Longevity Max	$1.00	None
Shift differential	$0.51, $0.58, $0.58	$0.01, $0.02, $0.03
Crew Chief Premium	$1.57 – [5% over the top end hourly base rate (including longevity) of pay for Technicians].	From $1.75 to $2.75
Taxi Run-up premium	$1.00 per hour for each shift (8 or 10 hrs) performing an aircraft taxi or engine run-up	None
Skill Premiums	Machinists and Aircraft Welders $4.25/Hourly	Machinists, Bench Avionics, Composites, Platers, and Aircraft Welders increase to $5.00/Hourly
Profit Sharing	PS pool based on 15% of Pre-Tax Earnings	Change to 2010 CO Plan (First dollar, 15% pretax profit). Replaces AIP.
Gain sharing	None	Will create program for Base and pay out 25% of 3P profits to TWU
Wage Adjustment	None	AA M&R will maintain relative industry position (2nd highest) for total pay in years 2 and 3. (Line AMT used as full up comparator – increase percentage flows to all other Title 1 classifications).
Holidays	Six statute holidays – HW paid at 2.5x. Two floating holidays (day off with ST pay). Can transfer HW pay to vacation or sick bank. Option if holiday falls on day off taking the first day back as HO.	Statute holidays from 5 to 8 and from 1.5x to 2.0x
Max Vacation	Max vacation – 7 weeks after 29 YOS. Can use portion of VC time to reduce benefits cost during open enrollment. All VC can be designated as DAT.	Add two personal days and restore second week for years 1-5; max 6 weeks @30 years
Sick Leave Accrual	12 days per year	From 5 days to 8 days
Sick Leave Bank	Max accrual of 110 days	Max from 150 to 250 days
Sick Leave Payout	SK paid at seventy-five percent (75%) of the employee’s hourly rate for first 7 days of occurrence and 100% thereafter.	SK restored from 50% to full pay
Injury on Duty / Occupational Injury Bank	Accrue 1 day per month, can only be used for Injuries on Duty.	10 days IOD for each injury – no accrual
OT / Field Trip	1.5x pay up to 12 hours, 2.0x for all hours worked after. Field Trips paid at 1.75x for all time away from station. New “job continuation” provision for hours up to 3.0 without regard to seniority or OT list.	1.5x pay for all OT
Duty Time	Maximum 20 hours per 24 hour period no more than 36 hours worked in two consecutive 24 hour periods	No change
CS Policy	CS rules are contractual	CS policy is at the discretion of Company
GEO Pay	$2.00 per hour Hawaii only. Company agrees to pay for study of high COLA cities in new agreement. No binding resolution after study is completed.	None
Early Out Program/Buy Out Option	$75,000 for those eligible to retire age 55 or older with 10 years in service or age 45 with 10 years in service with no retiree benefits.	Buy out option for Building Cleaners and Aircraft Cabin Cleaners only one time $25,000 pay out.
Safety and Health	Safety shoes paid for by Company	No change
Miscellaneous & Transportation	Interim assignments for recall employees up to 30 days while waiting badge clearance to be discussed. New resignation pass benefit program.	None
Defined Pension	Frozen during Bankruptcy, assumed and administered by PBGC	No change for current employees – 1.667% x FAE x YOS.
Retiree Medical – Pre 65	Retiree may select from active plans offered. Premiums: EE with 10-19 YOS pays 80%, 20-24 YOS pays 60%, and 25+ YOS pays 40%.	No change – prefunding applies for current EEs over age 50. For age 49 and younger, replace prefunding plan with sick leave purchase. New hires fund with SK.
Retiree Medical – Post 65	Medicare supplement plans offered to post 65 retirees, paying full cost of coverage minus a Company contribution equal to $90 per month per person covered.	Replace with guaranteed issue medical supplement plan, fully funded by employee.
401k / Defined Contribution	5% Company Defined Contribution to 401(k) account. Can defer up to three weeks VC into 401(k) bank during open enrollment.	Replace DB plan with 5.5% matching 401(k) plan for new hires only, company contributes first 2.5% as a defined contribution.
Amendable	6/30/2013	5/5/2013

Can the judge impose a new agreement or just new terms on a temporary basis?

If the parties are unable to reach an agreement on the terms of a modified collective bargaining agreement, the company can file a motion with the Bankruptcy Court for authority to reject the current collective bargaining agreement. As part of their motion, the company will present a proposal for modifications to the collective bargaining agreement that includes the terms the company’s believes are necessary for a successful restructuring. The Bankruptcy Court will rule on the motion (either granting or denying the company’s request to reject the collective bargaining agreement) but will not re-write the agreement. If the company is allowed to reject the collective bargaining agreement, it will likely impose the terms included in the modifications that are attached to the company’s motion. The TWU intends to give its members the opportunity to vote on the company’s last proposal, even if the TWU and the company have not reached agreement on the terms of a tentative agreement.

If the Judge imposes new terms can the company exit BK with those terms in effect?The modifications to the collective bargaining agreement that ultimately are approved by the Bankruptcy Court, if any, will remain in effect once the company emerges from bankruptcy.

Could the judge impose a 10 year contract?Absent a ratified agreement by the TWU, the Bankruptcy Court will grant or deny the company’s motion to modify the collective bargaining agreement, including the duration of the modifications. In most instances, a chapter 11 debtor’s business plan extends for a four to six year period.

If the Judge abrogates the contract can we immediately request release from the NMB due to the fact that we negotiated for years and in BK and were not able to come to terms?

We can obviously request a release at any time. However, the NMB has essentially unreviewable discretion as to whether and when it will release parties from mediation. In prior cases, the NMB has not released the parties. Recent case law has also clarified that there is no right to strike in bankruptcy.

If the Judge abrogates the contract can we immediately request release from the NMB due to the fact that we negotiated for years and in BK and were not able to come to terms? In reference to asking to be released as described above what reasoning could the NMB use to refuse to declare an impasse and release the parties?As mentioned above the NMB’s has, as a practical matter, unreviewable discretion to decline a request for a release. It generally does not issue a release unless it believes the threat of self help is likely to lead to an agreement. If it believes a release is not likely to produce a contract, or if it makes the judgment that a release will damage the prospects for reorganization at a bankrupt company, it typically will not grant the request. This is what happened at Northwest when the flight attendants union demanded the right to strike after it suffered court imposed concessions. As discussed above, recent case law has clarified that union members do not have a right to strike in bankruptcy.

What is the funded status of the DBP, Defined Benefit Plan, for the M&R Contract group? For the Stores group?The TWU pension plan covers all TWU groups and per the last report for year 2010 it is funded at 85.42%

What is the funded status funded status of the DBP for the other TWU Represented Groups?The TWU pension plan covers all TWU groups and per the last report for year 2010 it is funded at 85.42%

What is the AA cost out for each item in the M&R Contract? The stores contract?We have not received the company’s section 1113 “ask” so this information is currently unavailable.

What are the cost outs for each item in the other TWU Contract groups?We have not received the company’s section 1113 “ask” so this information is currently unavailable.

Is the Luby 2003 pension study available?We are unaware of a pension study conducted by Mr. Luby.

Historically during the bankruptcy process what has happened to sick time that employees have accumulated over the years in their sick bank?Sick time or injury on duty time that employees have accrued pre- and post- bankruptcy in their sick/IOD bank generally is not impacted by the bankruptcy, unless specifically requested by the company. The company has not filed any motions with the

Bankruptcy Court that would negatively impact accrued sick/IOD time.

Will the TWU be representing our retirees in the bankruptcy proceedings?President Little affirmed that the TWU has a “cradle to grave” philosophy regarding our members, and make no mistake the TWU will be taking an active role in representing our retirees. A retiree committee, headed by Howard Blaydes, has been established to deal with 1114 issues.

Manufacturers like Airbus have offered to sell base maintenance work in the cost of their airplanes (A319s); first is that a viable or predictable course for AA and what would that impact be? Also, what would the impact be if Boeing offered that service?Regarding Airbus and Boeing selling aircraft maintenance service, although both manufacturers offer both base and line maintenance services, we have not been made aware that the company is seeking them and we won’t be able to know if they are and what the impact would be until we see what the company proposes.

Can a current employee of AA or AE receive pension benefits from the PBGC before the AA or AE pension plans are terminated?No. The PBGC will begin paying benefits to eligible retirees only after the AA or AE pension plans are formally terminated and the PBGC assumes control of such plans.

Can a full time AA or AE employee receive pension benefits from the PBGC while they are employed full time by either AA or AE?No. An eligible employee will receive pension benefits (under the AA or AE plans or from the PBGC) only upon retiring from AA or AE. The only exception is if a full time employee is currently receiving benefits under a pension plan that was previously terminated and assumed by the PBGC. Such employees would continue to receive those benefits while they are employed by AA or AE.