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8.04.12 – (LAA) – LBFO Roadshows, APFA Strategy, Implementation Schedule, Pension Benefits, LBFO Voting Open

This is Leslie Mayo, National Communications Coordinator, with the APFA Hotline for Saturday, August 4, 2012.

The following documents have been mailed to each members’ homes and should be arriving this week:

Last Best and Final Offer
LBFO vs Term Sheet Comparison

Pre-1113 Tentative Agreement Summary

LBFO Roadshows
The APFA Negotiating Team visited three more bases this week – San Francisco, Los Angeles and St. Louis. Hundreds of Flight Attendants took time to learn about the LBFO, and several great questions came out of these visits, some of which are listed at the bottom of this hotline. Next week the Roadshows continue with Boston – August 7th, Chicago – August 8th and New York – August 10th. All meetings begin at 11:00 a.m. Click here for details on specific locations.

Roadshow Videos
Roadshow videos – by presenter – have been uploaded to APFA’s web site and can be viewed by clicking here. They are available for viewing by members only.

AA’s Chief Pilot Pulls Foot From Mouth
This week we saw senior management’s Chief Pilot John Hale issue a response/plea to line pilots. His communique was intended to address an email from an APA member that contained unverified statements supposedly made by Mr. Hale and his boss, Sr. VP of Operations Jim Ream. We will not be quoting the email from the APA member as the contents have not been verified for legitimacy. The response from Hale can be found by clicking here. APFA is investigating the validity of these claims since any decision of the magnitude referred to in this letter must first be approved by the UCC.

APFA Strategy
With APA and TWU’s ballot counts set for August 8th, there is a great deal of anticipation surrounding the results. The best outcome to facilitate a merger with US Airways and a promising future is to approve the LBFO. No doubt, this is counterintuitive to our members’ opinion of management. And it is very possible that management will attempt to credit any ratified agreement to employee confidence in its plan. APFA will not hesitate to publicly state that if our members ratify the Last Best and Final Offer, it is not because of their faith in management’s standalone plan. If our members approve the LBFO on August 19th, it is because 1) FAs recognize the choice between the LBFO over the Term Sheet includes preserving critical work rules such as sequence pay protection and 5-hour averaging, a 3% equity claim, an early out and pay raises among other improvements, and; 2) Approving the LBFO will expedite US Airways’ plan to merge inside of bankruptcy, which will get us closer to a new contract with a healthy airline, quicker.

In order for the Unsecured Creditors Committee to vote on a Plan of Reorganization (POR), it is important for both plans (US Airways and AA) to contain fixed costs. US Airways’ costs are fixed as a result of labors’ Bridge Agreements with US Airways’ management team. AA’s Standalone POR is nowhere near ready to be presented to the UCC without fixed costs from labor. Completed PORs from both parties will result in the UCC’s ability to make a decision on which plan is best.

If the LBFO is voted down, we await the Judge’s decision to either grant or deny the Company’s motion to abrogate our contracts. If the Judge chooses to allow the company to do away with our contracts, rest assured the Company has no intention of allowing us to remain under the current work rules of our contract as it stands today. Nor is it likely to default to the LBFO just because they’re good guys and they feel badly. We will be subjected to the Term Sheet from March 22nd. We may reengage in bargaining right away with the company, but with a “No Vote,” the company has little motivation to prove they are reasonable to the judge by getting another deal soon.

Implementation Schedule
If the LBFO is approved by the membership, the company’s tentative implementation schedule can be downloaded here.

Pension Benefits Are Secure
A question has arisen among some members regarding the security of our pension benefits, specifically in light of the pension freeze provision in the LBFO (Section IV.1). Rest assured that your vested pension benefits are fully preserved.

Under federal law and our pension plan, employee retirement benefits become non-forfeitable (or “vested”) upon attainment of normal retirement age or completion of five years of service. I.R.C. § 401(a)(7).  Vesting creates an irrevocable and non-forfeitable right to 100 percent of your retirement benefit. Our pension plan documents expressly acknowledge this requirement: “You have an irrevocable right to receive a benefit from the Plan when you become vested.” AA Flight Attendant Summary Plan Description (Pg. 4).
The proposed “freeze” to our pension plan would not change anything about vested benefits. Freezing the plan would only affect future accruals. There is no lawful action American could take in terms of a freeze that could in any way diminish any employees’ vested pension rights or vested pension amounts.
Some of the confusion may have been caused caused by the part of the LBFO htat deals with the defined contribution plan.  This provision is not about our defined benefit plan. This provision states: “Amend the Basic Agreement so that the Company is not required to maintain or fund or provide benefits under a defined contribution pension plan, except as provided below.” (Section IV.1). This provision applies only to defined contribution plans. It does not apply to our existing retirement pension plan which is a defined benefit plan. No provision in the LBFO could lawfully diminish anyone’s vested benefits in the pension plan.

DFW Reps in Ops
Please join APFA DFW Base Chair Chris O’Kelley and Vice Chair Margaret Barnes in Terminal C Operations on Wednesday, August 8th,  from 11:00 AM to 3:00 PM.  Chris and Margaret will address your questions regarding the LBFO and how it will impact you individually.

Q: Will I only be paid for 60% of my sick time?
A: No. Under the LBFO, sick time (when using paid sick) will be paid at 100% whether you are using the short term sick or the long term sick, although the short term sick bank will be capped at 60 hours per year. The 60% pay is a part of the 1113 Term Sheet sick policy proposal.

Q: If the LBFO is approved by the membership, will we lose the US Airways Bridge Agreement?
A: No. So long as there is a POR (Plan of Reorganization) approved by the UCC that provides for a US Airways-controlled merger, we will then move to the US Airways Term Sheet.

Q: If our balloting period concludes on the 19th, but the judge is expected to rule on the 15th, will he withhold the decision for our workgroup until after our balloting is finished?
A: We have no doubt that the judge will grant an extension. His comments throughout the hearings were such that he wants nothing more than consensual agreements between the parties over his having to render a decision. We also do not anticipate any pushback from the company regarding our balloting timeline. Note: the judge’s decision has been written since before June 22.

Q: Will the Early Out/VEOP be limited to a specific number of FAs or will it be granted to all flight attendants who qualify?
A: The Early Out will not be limited to a specific number. All FAs who are eligible, will be able to take advantage of the VEOP.

Q: If the LBFO is voted down, I heard that the 1113 will be imposed but that it won’t include the wage increases, 401(k) match or profit sharing. Why not?!
A: Those three items in the Section 1113 Term Sheet are contingent upon reaching a consensual agreement, therefore, they will not be included in the Term Sheet if we reject the LBFO.

Q: If we vote down the LBFO, what happens?
A: Judge Lane stated repeatedly that the only issue he has before him is whether or not to allow American to reject our collective bargaining agreement. If we vote down our LBFO, the Judge will render his decision soon after the 19th. If our contract is abrogated, we are subject to AA’s March 22nd Term Sheet.

Q: When does the look-back period begin for purposes of maintaining employment with AA?
A: The annual look back period to maintain employment, requiring 420 paid hours, will run concurrently with VC and SK accrual and will begin on December 31, 2013, looking back to January 1, 2013.

Q: When does the look-back period begin for purposes of maintaining subsidized health benefits?
A: The annual look-back period to maintain subsidized benefits, requiring 600 paid hours, will begin August 1, 2013, looking back to July 31, 2012.

Ballots – LBFO Voting Open
Ballots are due August 19, 2012, 10:00 a.m. Central Time. If you have not received your ballot or have misplaced your VIN and PIN, please contact the National Ballot Committee for assistance. Call 817-540-0108 ext. 8311 or email Remember that with online and telephone voting, you can change your vote until the voting period concludes. Only your last vote placed will count.


AmericanAirlines + US Airways
“Our Future Depends On It”

Leslie Mayo
APFA National Communications Coordinator
APFA Headquarters 817-540-0108

1004 West Euless Boulevard
Euless, Texas 76040

Phone: (817) 540-0108
Fax: (817) 540-2077


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