From the Flight Service website:
This is Lauri Curtis, and today is Wednesday, July 2, 2008.
Last month we announced a number of actions designed to help us overcome near-term challenges and secure our company’s long-term future. These included significant reductions to our schedule and retiring a number of aircraft. As you recall from our announcements on May 27 and June 25, we are cutting capacity by 11 percent to 12 percent compared to 2007 levels and our fourth quarter American Eagle capacity by 10 percent to 11 percent compared to 2007.
Now that we have decided on the reduced flying schedule, let me share with you what I know about the impact of the schedule reductions on our people --- which of course is the most difficult and disheartening aspect of this situation.
As you would expect, our reduced flying schedule will translate to needing fewer people. We anticipate an 8% reduction in force for Management and Support Staff throughout the company and we will also have an overage of flight attendants.
Consequently, earlier today we delivered an official “WARN†letter to APFA. Federal law requires employers to provide specific advance notice, under the Worker Adjustment and Retraining Notification Act, in cases when employees may experience involuntary loss of employment. Please know that the WARN letter was not a layoff notice for any particular individual — rather, it ensures compliance with the federal WARN law while we continue to hope that the number of actual layoffs will be minimized. Also today, we are sending “Subject to Furlough†letters to the 900 most junior active flight attendants on the system seniority list.
In the meantime, we are doing the best we can to minimize the actual number of involuntary flight attendant furloughs, by offering voluntary options to eligible flight attendants who would like to take some time off of work. The voluntary options include a new Voluntary Bridge to Retirement option in addition to the other provisions provided for in the Collective Bargaining Agreement (CBA).
Voluntary Options
There are five voluntary options, all with different eligibility parameters, that flight attendants may consider.
Voluntary Bridge to Retirement- To be awarded in advance of other types of leaves of absence. The Company reserves the right to limit the number of Flight Attendants who may accept the program, and to discontinue the program at any time. Full provisions of this program are available on Jetnet, but include;
Eligibility: A Flight Attendant, not currently on furlough, who is at least 50 years of age, with at least 15 years of Company Seniority as of August 31, 2008
Permanent separation without recall rights
Severance: $15,000
COBRA Medical Coverage: The Flight Attendant initially will be offered six months of subsidized COBRA medical coverage at 20% of the normal COBRA rates (subject to the Flight Attendant complying with applicable requirements and conditions). A Flight Attendant who complies with applicable requirements will remain eligible to purchase COBRA medical coverage for another 12 months at full COBRA rates. Subject to the provisions of the applicable retiree medical plan (which controls as to retiree medical matters), the Flight Attendant will become eligible for retiree medical at age 55 if they continue to prefund until that time, provided that s/he began prefunding when first eligible, and has continued to make prefunding payments since that time.
Travel: AA/AE travel only, D2 eligible travelers only and subject to imputed income after 90 days. At age 55, retiree travel will be identical to travel for other retirees.
Broad Based Stock Options: Stock options may be exercised up to 90 days after separation. Stock Options will be forfeited after 90 days
Separation Date: At Onboard Service discretion subject to operational needs
A Flight Attendant cannot take both this Voluntary Program and Article 30
Overage Leaves- (Flight attendants who receive a Subject to Furlough letter are not eligible to proffer for an Overage Leave). Crew Resources will be able to forecast flying for each base. Overage leaves are offered by base and awarded to eligible flight attendants by base in occupational seniority order. Overage Leaves of up to a year in length will be offered. We anticipate that the proffer for Overage Leaves will open on July 7 and close on July 21. Once granted, Overage Leaves of Absence are irrevocable. Please see Article 16 of Collective Bargaining Agreement for full details on Overage Leaves.
Partnership Flying- (Flight attendants who receive a Subject to Furlough letter are not eligible to proffer for Partnership Flying.) If a surplus still exists after Overage Leaves have been granted, Partnership Flying assignments will be offered to eligible flight attendants at individual bases at which a surplus still exists. Partnership flying is for an irrevocable period of three (3) contractual months. Eligibility criteria can be found in the Appendix F of the CBA.
Retirement-The current AA/APFA Collective Bargaining Agreement lowers the age at which an eligible flight attendant can elect to retire from 62 to 60 without any reduction in your pension benefit, and the pension benefit is calculated on your top four years of earnings, rather than the top five.
Article 30 Early Retirement-Provides for early retirement for eligible flight attendants at age 45 (but less than age 55) with 20 years of company seniority. This option provides a $25,000 lump-sum payment; specified life insurance and specified medical benefits; and 10 round-trip D2 passes per year.
I encourage those of you eligible and interested in any of these options to consider them carefully. Hopefully, there will be sufficient numbers of flight attendants participating in these voluntary options to either offset the entire overage or greatly reduce the eventual number of necessary furloughs.
While I am sorry to be the bearer of such unfortunate news, I am thankful there are options available that will lessen the adverse impact on the careers and livelihood of our people. If you have any questions or concerns, your Flight Service Manager will be available to help.
Please fly safely.