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12.20.02 – (LAA) – Don Carty Requested APFA Agree to Forego 3% Pay Increase, Overage Leave and Partnership Flying Proffer Opens 12/11, WTS Forms Being Accepted

Special APFA Hotline

December 20, 2002

This is APFA President John Ward with a special APFA Hotline message for December 20, 2002.

As I previously reported, during a meeting I attended on December 6 with the other APFA National Officers, and officers of APA and TWU, and with top management of the Company, AMR Chairman and CEO Don Carty requested that APFA agree to forego the 3% pay increase that you are scheduled to receive effective January 1, 2003, and to also forego increases in purser pay scheduled for July 1, 2003. While no other specific relief was requested from APFA, Mr. Carty’s December 6 letter noted that the request to forego the pay increase “cannot be the only” relief requested and added that “the restructuring of our labor agreements is inevitable.”

I want to share with you what APFA has done and will be doing in response to the Company’s request.

First, I want to emphasize something that there should be no question about. APFA’s response to this current Company request will be guided by our commitment to do whatever is necessary and appropriate to best protect the interests of the American and TWA LLC flight attendants. With that in mind and as our guiding principle, we also intend to approach the Company’s request in a responsible fashion. We are all aware that our industry has suffered from the effects of September 11 and from the economic condition of our country.

As a first step in determining how best to respond consistent with your interests, APFA has engaged the services of a financial advisor to conduct a necessary, thorough review of the pertinent financial and related data and issues. A meeting has already been held with top management financial personnel, including the chief financial officer of the Company, and the financial review is proceeding as expeditiously as feasible consistent with our commitment to take those actions which will best protect the flight attendants we represent. During this financial review process, we also anticipate that we will be having further discussions with senior management. While it’s difficult to say how long this process will take until we are further along, we hope that it can be concluded some time in January.

Once this review and analysis is concluded, I intend to convene a special meeting of the APFA Board of Directors to address these issues in depth and determine an appropriate response.

News reports of troubles at other carriers in the industry and at American of course are upsetting to all of us. Rest assured that we are not treating this situation lightly. However, at the same time, it is essential that we do our homework, that we obtain and analyze all the pertinent information, and that we proceed calmly and thoughtfully in determining the best course to take. We will continue to update you on developments.

Thank you for calling. Please stay on the line for the remainder of this week’s message.

APFA Hotline

December 20, 2002

Hello. Today is Friday, December 20, 2002. This is APFA Communications Coordinator George Price with the APFA Hotline.

The Overage Leave and Partnership Flying Proffer opened on December 11th and will close at 0800 Central Time on January 07, 2003. The leaves are for 12-month key blocks beginning February 2003 through January 2004 and 6-month key blocks beginning February 2003 through July 2003. Auxiliary blocks may also be offered in 3-month and 9-month blocks for the 12-month key blocks and 3-month and 3-month blocks for the 6-month key blocks. Partnership Flying may also be offered for the period February through April 2003. Awards should be posted on or about January 10, 2003. If you are interested in Partnership Flying, the APFA Partner Finder is up and running on the APFA Web site to assist you in finding a partner at your base.

Willingness-to-Serve forms for the positions of APFA Base Chair, Vice Chair, Operational Council Representatives, and Ad Hoc Member of the Executive Committee Place #5 were included in the November/December issue of Skyword. Completed Willingness forms for Chair, Vice Chair, and Operational Council Representatives are due in the designated Post Office Box by 1000 Central Time on January 21, 2003. Willingness forms for Ad Hoc Place #5 are due by 1000 Central Time on February 11, 2003. Ballots for Chair, Vice Chair, and OCRs will be mailed on February 8, 2003 and will be due back in the designated P.O. Box by 0900, March 11, 2003. Please include the position you are running for in the area designated for “slate information.”

As a result of discussions between the APFA Safety Department, APA, and American regarding continued unrest in Venezuela, layovers in Caracas will be suspended until at least January 6, 2003.

The Company notified the APFA this week that it plans to discontinue utilizing volunteer foreign language qualified flight attendants on selected domestic legs for marketing reasons effective January 1, 2003. In doing so, the Company expects to save between $1 million and $1.5 million per year.

The 108th Congress will convene in early January. One of the first issues to be brought forward by key Republican Senators John McCain and Trent Lott will be “baseball arbitration.” This legislation is aimed at modifying the Railway Labor Act to eliminate aviation union’s right to strike and forcing resolution through binding arbitration. The style of arbitration outlined in this legislation is a “winner-take-all” approach. This means a third party would be given the authority to decide between the company’s position or the union’s position on a number of the outstanding issues. These are most often compensation, work rules, retirement, and other economic issues. APFA is working with other labor unions to mount a campaign against this legislation. The APFA membership will play a vital part in the campaign itself. One of the first ways is to help gain a stronger presence in Washington, D.C. through voluntary donations to the APFA Political Action Committee or PAC. PAC funds are separate and apart from union dues. They are used to make donations to members of Congress who support APFA’s position on key issues. American has donated literally millions in Washington, D.C. in support of legislation such as “baseball arbitration.” We may not have the same financial resources as American, but we have a very active membership who has answered the call to action successfully many times! If you would like to begin participating in the APFA PAC, please use the tear out card in the center section of the November/December Skyword or go to the PAC page under the “Government Affairs” icon on the APFA Web site. You do not have to provide your Social Security Number. The amount of your donation is strictly up to you. Please watch the APFA Web site and listen to this hotline for additional details of the APFA plan of action and your role as an APFA member.

There were several additions to the APFA Web site this week. These include the Official Minutes of the APFA Board of Directors meeting that took place in Washington, D.C. on November 13-15. The minutes from the Executive Committee Meeting held December 4-6 will also be added to the site soon. The initial contact information for all members of Congress was added to the “Government Affairs” page. Additional job opportunities for furloughed Flight Attendants were posted this week on the Furlough Page. Finally, information on Holiday Pay was included under “Hot Topics.” As always, the Aviation Industry News page is updated daily with news on the industry and American Airlines specifically.

From the Contract Department: Effective with the contractual month of January 2003 the trigger which starts the seven -day clock has been expanded to include training and reserve standby duty in addition to a trip sequence. The start of the seven-day clock begins at 0001 on day 1 regardless of the start time of the assignment on that day and runs through 2400 on day 7.

Once the seven day clock starts you must be given a period of 24 hours free from duty prior to the end of the 7th day. This 24-hour period may be at home base or at a layover station and can be a rolling 24-hour period rather than a calendar day.

Whether you are a regularly scheduled Flight Attendant or on reserve the trigger must be a trip sequence, training at home base, a deadhead to training or a reserve standby assignment. Special assignment, reserve availability (no fly), or available days will not trigger the seven-day clock.

The Hotel Department is once again reminding all Flight Attendants to pay all incidental hotel charges before leaving the hotel. We are currently in jeopardy of losing some of our favorite properties as a result of Flight Attendants leaving personal charges unpaid upon checkout.

As a reminder, bids for the month of January close at 0001 on December 22nd. Due to the capacity of the Citrix Server, the availability of PCFOS is sometimes limited towards the end of the bidding period. Please keep this in mind if you planning to use PCFOS to enter your bids.

The last day for ordering uniform items for 2002 is December 27th. Remember, you are only permitted to carryover 9 uniform points into next year.

In Industry News:

This week, the Company announced plans to accelerate the retirement of the F100 aircraft. The original plan was to begin retirement of the F100 in the third quarter of 2003 with the last airplane leaving the fleet by the end of 2005. The new timetable has the first F100s being retired in January 2003 and the final airplane leaving the fleet in the fourth quarter of 2004. The Company claims that this new accelerated retirement schedule will not substantially change the existing capacity plan. There are 74 F100s currently in the American Airlines fleet.

Also this week, American announced that it plans to begin seasonal service between JFK and Rome beginning May 1, 2003, and between JFK and Barcelona, Spain, beginning June 15, 2003. Service to Barcelona is subject to governmental approval. American will also begin a second seasonal DFW-Paris trip on May 1. The second DFW-Tokyo trip will become daily in June.

At United, unions met on Monday with advisers to review their company’s proposals for cost cuts. The company is seeking $2.4 billion in annual cost cuts from labor as compared to $1 billion the unions had agreed to as part of the federal loan application. The application was rejected by the Airline Transportation Stabilization Board, which then resulted in United filing for bankruptcy protection. On Thursday, United announced that it would lay off 599 maintenance workers effective January 26th. This is in addition to the 419 IAM workers announced in October.

Delta Air Lines announced this week that only about 4,000 employees had opted for the early retirement or buyouts being offered by the company to avoid layoffs. Delta had previously announced it would cut between 7,000 and 8,000 jobs by next spring. The airline said that it is looking to eliminate between 1,500 and 2,300 Flight Attendant jobs through voluntary and involuntary reductions.

For more information on the airline industry and American specifically, please visit the Aviation Industry News page on the APFA Web site.

The APFA Offices will be closed on December 24th and 25th in observance of Christmas. If you have an emergency, there will be an Officer on Duty to respond to your call. All calls of a non-emergency nature will be routed to the appropriate representative or department for handling on the next business day.

On behalf of the officers, representatives, and staff of the APFA, have a very merry Christmas.

Please remember there are 2,124 Flight Attendants on furlough during this holiday season.

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