Representing the Flight Attendants
of American Airlines

Representing the Flight Attendants of American Airlines

05.06.05

This is Leslie Mayo, National Communications Coordinator, with a Hotline update for Monday, May 9, 2005.

The company has acknowledged that the reduction in vacation time during the summer and holiday months in 2005 is a major concern for our members. APFA has been working with the company to identify additional vacation time during these desirable months. The company believes there is a high probability that some additional vacation time will be available for the months of June, July and August. This is primarily due to recent proffers and attrition. Most of the vacation time available for June will be at Domestic bases. There will be limited availability at International bases. In order to request a vacation move-up for June, please use HISEND form number 3 by 0800 Central Daylight Time on May 11. Awards will be made in seniority order and posted on May 13. If you previously submitted a move-up request for June and are no longer interested, please rescind your request. APFA continues to work on additional move-ups for other months and will make an announcement on this Hotline.

Please stay on the line for Friday’s regular Hotline message…

This is APFA Retirement Specialist Jill Frank with the hotline for Friday, May 6, 2005.

Next week your National Officers, elected and appointed APFA representatives and many line Flight Attendants will head to Washington DC to meet with our Congressional representatives on the Hill. There are many issues that we will be discussing, I would like to tell you about Pension Reform and what we hope to accomplish.

On April 26 I attended a hearing of the Senate Subcommittee of Health, Education, Labor and Pensions concerning retirement security and pension issues. There are currently two proposals being discussed in Washington.

One is Bill S 861 also known as the “Employee Pension Preservation Act of 2005”. This is a bill which was introduced on April 20, 2005 by Georgia Republican Senator Johnny Isakson. Senator Isakson is a member of the Senate Committee on Health, Education, Labor and Pensions which is the Committee most likely to bring legislation on this issue to the floor. This Bill is also being referred to as “the Airline Bill” because it is supported by Delta and Northwest Airlines. There are two primary reasons why neither American Airlines nor APFA support this bill:

One – It requires an irrevocable, permanent election to freeze a pension plan in order to take advantage of the Bill’s extended funding terms. In plain language – if you want this relief, your plan is no longer going to accrue any benefits. We want pension reform, but we want to continue our defined benefit plans which this Bill would not allow.

Two – It allows 25 years to spread out accumulated funding deficiencies. Although we do support the idea of longer time periods to fulfill funding deficiencies, we believe that 25 years is too long and would seriously dilute the stability of pension plans.

Last week a letter was sent to all American Airlines employees from Michael Russo, the Manager of Employee Advisory Services, which stated that the Company (and I quote) “is again taking advantage of legislation that allows the required retirement funding payments to be spread out more evenly over the next five years” and “that the company’s decision to take advantage of the Pension Funding Equity Act, as it did in 2004, will not affect your vested pension benefits because it does not reduce the level of required pension contributions over time.” (End of quote). The legislation that American is referring to allowed a temporary extension that could be taken twice, once in 2004 and once in 2005.

The proposed pension reform legislation addresses a permanent extension of funding time requirements, the big question is how long should these time periods be?

The second proposal being reviewed in Washington is President Bush’s plan to “Strengthen Funding for Single-Employer Pension Plans”. This plan, along with Social Security Reform, is one of the two topics being promoted by US Secretary of Labor Elaine Chao on her “60 Stops in 60 Days” tour. The Bush administrations outline of this proposal summarizes the main elements and lists the key provisions for each element in a 33 page document which is available on the APFA web site. Basically it purports to have three main elements:

One – reforming the funding rules to ensure that sponsors keep their pension promises.

Two – improving disclosure to workers, investors and regulators about pension plan status.

Three – reforming premiums to better reflect a plan’s risk and restoring the PBGC to financial health.

On the surface these goals are all admirable, but as they say “The Devil is in the details”. .

For instance, they want to raise the premium that is paid to the PBGC for each employee from $19.00 per year to $30.00 per year. This would require companies to use capital to pay for insurance, perhaps limiting money available to fund the plans.

The Bush plan also wants to tie plan funding requirements to the bond rating of the corporation sponsoring the plan rather than the funding level of the plan.

We do not support either of these provisions.

There are also other areas that we feel need to be addressed.

One of the biggest concerns we have is that other companies have used bankruptcy as a means of destroying pension plans. Only by having legislation that limits changes in plans to those made as the result of the collective bargaining process can we protect our plans and guarantee that others will not shed theirs arbitrarily.

APFA, APA, TWU and American Airlines are all in agreement that permanent legislation for Pension Reform is an admirable goal. We have drafted a joint statement offering our suggestions of the details that we would support. This statement is available on the APFA web site and will be given to all of the representatives that we visit on May 11.

In it we actually support many of the broad categories that the Bush administration is addressing, but there are also a number of areas where we either do not agree or feel more needs to be stated. It is in these areas that we need to make sure our representatives know what our proposals are.

I hope you will join us on May 11 to get this message out to the people who represent us in Washington. We will give you written summaries of the positions APFA holds which you will be asked to leave with the staff members of the representatives that you visit.

Did you know that the Credit Union offers free financial planning services to its members? That fact and detailed descriptions of retiree pension, travel and health benefits are all part of the Retirement seminars that are being held throughout the system for Flight Attendants. These seminars are being conducted by an AA retirement counselor with participation from the Credit Union and APFA. During the presentation we have an opportunity to explain how your final average salary is calculated and where you can find your personal salary history. During April and May we have been in to Los Angeles, San Diego and Chicago and have had an average of over 50 Flight Attendants at each session. We have future sessions scheduled in Miami on May 19 at 10 AM and 1:30, PM; in New York at JFK on June 15 at 2PM and in NY at LaGuardia on June 16 also at 2PM.

We are currently working on scheduling sessions in Boston, Washington DC, Raleigh and Seattle. We strongly encourage all Flight Attendants to attend a retirement session to become familiar with your benefits. It’s never too early to begin planning and there are many decisions that you make during your years of employment that can impact your pension benefits.

I hope to see you at one of the future seminars, all Flight Attendants are welcome. There is a lot of information and many have attended multiple sessions. I plan to be in attendance at all of the upcoming seminars, it is a great opportunity to share information and visit with the men and women I have worked with over the past 38 years before we all retire.

And now, here’s Leslie with the remainder of this week’s hotline. Leslie….

Thanks, Jill.

This is Leslie Mayo with the rest of the APFA Hotline for Friday, May 6, 2005.

Please remember our 4,240 furloughed flight attendants and our 12 members serving full-time in the armed forces.

The second of four membership opinion surveys scheduled for this year opened yesterday. Please visit www.www.apfa.org and click on the survey linkat the top of the page. You will then be directed to the University of North Texas’ website. All surveys will remain confidential and only percentages will be reported to APFA. This is a very important survey for each member and APFA urges everyone’s participation. The survey will be available for four weeks ending June 2, 2005.

Next Wednesday, dozens of APFA representatives and members will be lobbying Congress on Capitol Hill in Washington, D.C. Bring your Skyword Express with you as it will help you respond to some of the issues we will be addressing such as, Pension Reform, Fatigue and Fuel Prices. APFA and our lobbyist on the Hill will be providing a briefing as well as talking points for all of you who join us. We look forward to seeing you – remember there is great strength in numbers. Visit www.apfa.org and click on the We’re Restless” link for a downloadable bagtag insert.

On May 10th, United Airlines will ask the Bankruptcy judge overseeing United’s massacre of its employees’ pensions and contracts, as well as other bankruptcy-related items, to approve the elimination of all pension obligations. The PBGC agreed two weeks ago to United’s proposal of terminating its pension obligations in exchange for $1.5 billion in UAL stock. If approved, this termination will save United more than $645 million a year AND reduce the retirement benefits for many employees by literally thousands of dollars per year.

If Judge Wedoff approves the agreement between UAL and the PBGC, this would pave the way for a trial to begin requesting Wedoff to approve the abrogation of United’s contracts with AFA, IAM and AMFA. United would then be free to impose all kinds of new work rules and pay cuts on all of its employees – not just the non-unionized groups. This dangerous move will ruin the retirement of thousands of UAL employees and may set a precedent throughout the airline industry. Please contact the PBGC and your Congressperson today by going to www.apfa.org and clicking on the link entitled Support AFA’s Efforts to Save Their Pensions.”

From the APFA Scheduling Department: Reserve Limited Option II flying and Optional Exchanges are not paid on top of guarantee. The flying is measured against guarantee, meaning that if I fly 60 hours on reserve and pick up a ten-hour optional exchange trip, I will still only be paid 75 hours, which is the reserve guarantee. I won’t be paid guarantee plus the ten hours of Optional Reserve.

We’re now six days into our Purser Flexibility Test. A few issues have developed. First, don’t forget that if you are a “V” and the purser position opens on your trip, you will be moved up prior to the trip being offered during the 1200 noon run of Make-Up in Day Before Coverage. It’s good practice to check and see if you have been moved up the day before the trip, so you can prepare accordingly. Two people have used the Purser Pick Up Option as of Wednesday. If you’re interested in flying, this is a great option available to Pursers. See www.www.apfa.org for the HISEND message numbers. Finally, lots of pursers have taken advantage of the increased TTOT flexibility. Trading off of a non-purser sequence on to a purser sequence is a great enhancement, but it was not meant to turn the lights GREEN for all trades for pursers. The TTOT cannot negatively impact daily manning, meaning some days will still be considered RED for trading purposes. For example, you may not be able to trade your non-purser Christmas trip for a purser 12 Dec trip. Please send any comments, positive or negative, about the Test to the Scheduling Coordinator.

APFA has been notified that AA intends to bid PVM sequences for the months of June, July and August based on load factors. This concept was tested in December 2004 and was considered to be a success. System wide, that means that 300-400 less flight attendants per month will need to serve reserve during the summer. This is good news for most people, but APFA does anticipate that there will be more exercises of senior bump in September and October by flight attendants hoping to avoid winding up on November/December rotations. Also, there will be fewer Open Replacement lines in those months, so make sure to bid accordingly.

APFA and the company have agreed to a Language Speaker Test on A300 trips at Boston International. This test is an effort to reduce Flight Attendant bid denials for both speakers and non-speakers, provide more recognition for Flight Attendant seniority in the awarding of bids, and improve Flight Attendant flexibility. During the test, foreign language speakers will be permitted to work in any cabin as opposed to one-speaker-per-cabin. As a result cabin-position awards will be made in seniority order among the crew, without regard to the cabin restrictions. The BOS-I A300 trips will continue to have 2 speakers per aircraft during the test. The test began May 1st and extends through September 30th. Alaska Airlines and its pilots have a new arbitrated agreement following talks since 2003. As usual, the sticking points were pay, pension and health insurance. Terms include about 26 percent in pay reduction and increased individual contributions to their health plan. No changes were made to their pension or profit sharing plans. Alaska Airlines’ 1,465 pilots are represented by ALPA.

AirTran airways and its 1,300 flight attendants represented by AFA, have reached a Tentative Agreement. Details have yet to be released on the 42-month contract.

That’s it for this week. Thanks for calling the APFA Hotline.

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