TWU-IAM Association Negotiations Update

Today American formally requested that the National Mediation Board (NMB) assign a federal mediator to our negotiations with the TWU-IAM Association. We believe this is a positive development because the NMB will help us achieve what the company and Association have not been able to do thus far: reach a joint collective bargaining agreement (JCBA) for our team.

Not having a contract is postponing additional pay increases, richer retirement benefits, improved holidays and vacation, and a lucrative early out for our TWU-IAM team members. And, not having a joint contract is making it difficult to be one team.

While we had all hoped a JCBA would have been completed by now, that hasn’t happened. We remain far apart on significant issues and could use help from an outside party to bring us together. The NMB is in place for the purpose of bringing companies and unions to a meeting of the minds and we can request their formal assistance now that the separate IAM and TWU contracts have become amendable. The NMB appoints mediators to get deals done and has a long history of success in accomplishing just that.

We have asked for a mediator to be assigned on an expedited basis. Once that happens, the mediator will take over the direction, scheduling and pacing of negotiations, ensuring that both parties are prepared and moving forward, and with a goal of reaching a fair agreement.

As we enter this process, it is important to review where we are in these negotiations. American has a comprehensive proposal on the table that would give Association-represented members the best contract in the industry. As proof of this, we have consistently stated that we would sign the contracts/policies in place at Delta or United instead of the proposal we have put forward.

Highlights of the company’s proposal include the following. You can find detailed information on each on Jetnet:

• Increased Pay: The highest rates of pay and premiums combined in the airline industry. In addition to the average $20,000/year increase top of scale AMTs have received since the 2016 interim agreement, each AMT will receive an additional $8,000/year on average. In addition to the average $13,500/year increase full-time top of scale Fleet Service team members have seen since the interim agreement, each will receive an additional $2,500/year on average. The agreement also includes a $3,000 signing bonus.
• Increased Paid Time Off: The better of the current TWU and IAM contracts or an enhancement to what is offered today, including improvements in holidays, vacation, sick and on the job injury (OJI) time. We have eliminated the current holiday disparity between legacy carriers and provided industry-leading holidays and holiday pay across the board.
• Retirement: Industry-leading retirement benefits that include an automatic company contribution of 5 percent of salary into a 401(k) plan whether or not the team member contributes to their retirement. In addition, if the team member does make contributions to their 401(k), the company would match up to another 4 percent of salary, for a total company contribution of up to 9 percent annually.
• Medical Benefits: Competitive medical benefits that align with the plans 90 percent of American’s team members are already on.
• Scope:
  • A requirement that more maintenance work is done in-house than at any other U.S. carrier. No less than 50 percent of all aircraft overhaul and modification work done for the airline is guaranteed to be performed by Association team members.
  •  Continue the ability to do Line Maintenance work on our aircraft in international locations up to 12 percent of total Line Maintenance hours.
  • Team members dedicated to components will equal at least 20 percent of the maintenance headcount dedicated to aircraft overhaul and modification work.
  • Fleet Service team members will continue to perform work at more cities than their peers at Delta or United.
  • A requirement that no one on the property today will be out of a job or will have to move to keep their job as a result of the new agreement.
• Early Out: Team members with at least 15 years of service who wish to leave the company would receive an early out payment equal to approximately one year’s salary. For AMTs, that’s $105,000 and for Fleet Service, that’s $65,000 for full-time team members and $40,000 for part-time team members.

As attractive as we believe that proposal is, the Association is still demanding much more. There are many differences to be resolved but, most notably is increased pay that is significantly higher than any other U.S. carrier, and the costs associated with putting Association team members into the US Airways medical plans. And although the company currently performs far more of its own maintenance and fleet service work than any other U.S. airline, the Association has proposed we insource additional work, making us even more out of line with the industry and requiring we add an additional 12,000 Association team members.

With every agreement we’ve negotiated since the merger, we’ve said that our team should have a contract that is as good as or better than their peers. We’ve lived up to that commitment in each JCBA we’ve signed and our current proposal to the Association meets that standard as well. But we cannot let our contracts become dangerously uncompetitive and that’s what the Association’s proposal does. On top of the industry-leading offer the company has made, the Association’s proposal would cost an additional $3.6 billion over the life of the agreement.

We share these details not to get into a point-by-point debate, but to illustrate that we have real, substantial differences that we can’t seem to successfully conclude. Bringing in an experienced mediator appointed by the NMB, who has extensive industry experience, and who has successfully mediated previous agreements, will help get us over the finish line. A mediator will give all parties involved a different perspective and drive us to a successful conclusion. This negotiation has gone on too long and we need to reach an agreement.

Our team will be at the table with a mediator as soon as one is assigned and available, and we will stay there until these negotiations are concluded. Thank you for your continued dedication to American, its 130,000 team members and the 500,000 customers we serve every day.