When does the 4.3% pay increase take effect?
The increase will be implemented as soon as the Company’s plan of reorganization is approved and it exits bankruptcy. Since merger with US Airways is part of this plan, the merger must also be approved before the Company exits bankruptcy. This process is moving quickly. On April 15 American submitted its plan of reorganization to the Bankruptcy Court several weeks ahead of schedule. It now must be approved by AA’s creditors, US Airways stockholders, various government agencies such as the Departments of Justice and Transportation, and the Court. US Airways informed its employees that it expected that it would secure all required approvals and close the merger sometime in the third quarter of this year.
What are the components of the equity stake?
The equity stake has several components. The largest part of the 4.8% is based on the value of the savings and additional revenue which American projects will be created by scope and pension concessions in the LBFO. Other portions of this stake were built up based on “me too” obligations in the agreement, and the value of grievances which, after full presentations by the Union before the System Board, the Company agreed were meritorious. This includes the 757 outsourcing grievance and the grievance over medical premiums. A very small portion ($680,000) of this stake was based on expenses incurred by Locals in the bankruptcy process, expenses for which they may request reimbursement. The International has not requested that any portion of the equity stake be used to reimburse it’s legal or professional expenses growing out of the bankruptcy. While we will not know the full value of the equity negotiated by the TWU until the value of the AA/US Airways combination is determined, it is likely to be worth well over 350 million dollars. We will work to distribute this value to the membership as quickly as possible, and we hope (but cannot guarantee) that it will be in your hands sometime in the third quarter of this year.
A Committee of TWU Local Presidents assisted by financial experts has been tasked to examine the various alternatives for allocation and distribution of the equity stake and make recommendations to the leadership and membership. The Committee will hold full briefings with TWU members throughout the system to discuss its work and secure membership feedback before any plan is finalized.
The TWU and our brothers and sisters at the APA and APFA were the driving force behind the AA – US Airways merger, which is now the key to reorganization and exiting bankruptcy. All three unions came to the conclusion that the Horton management team that took us into bankruptcy could not make the Company profitable, and we took collective action to change course. While doing this, we locked-in an upside for our members with an additional 4.3% wage increase. With this wage increase, by September 2015, we will have received a 17.4% increase in base pay. At that time, our contract further guarantees that our wages will be adjusted upwards to industry standard rates. These improvements including the 4.8% equity stake obviously would have never happened if we had not sought out the US Airways alternative. The TWU, APA, and APFA worked together to make this happen
To learn more about the role that our unions played in driving the merger, and changing our future for the better, read The Dallas Morning News report on the reverse side.