This is MEC Chairman Bill Pollock with a Chairman’s message to the pilots on Saturday, October 16th.
On Friday, Bankruptcy Judge Stephen Mitchell ruled in favor of the Company’s 1113(e) motion, granting immediate interim contractual relief on those unions without a ratified agreement in place. The judge stated that even though granting this relief on an interim basis would drastically disrupt the lives of thousands of employees by inflicting severe financial hardship, and even acknowledging that management had yet to take a pay cut commensurate with what it was seeking from labor, he nonetheless had to agree with the debtor in granting virtually everything they sought from the court. Judge Mitchell referred to US Airways as a “ticking fiscal time bomb†that would suffer a “meltdown†without the interim, court-imposed relief.
The interim relief imposed included an immediate across-the-board 21 percent pay cut, relief of the 279 minimum aircraft, 10 percent DC plan contributions, increasing the monthly flying cap to 95 hours, interim IAM outsourcing, and duration of imposed relief for four months. A copy of the order can be found on the pilots only home page under “Bankruptcy Information.â€
As we previously told you, ALPA was successful in negotiating a “wait and see†agreement with the Company. If the TA is voted up on October 21st, then the terms of the TA would retroactively supercede the terms of the interim relief granted by the Court. In other words, instead of a 21% pay cut from October 15th, ALPA would incur an 18 percent reduction as per the terms of the ratified TA. On the other hand, if the membership should vote down the TA, then we can look forward to the 21 percent reduction. Quite simply, it’s your choice.
I’ve noticed, from some of the questions that pilots have been asking at the roadshows, that there’s been some confusion regarding the differences between the 1113(e) and the 1113© process. It is important for pilots to know that if the TA is voted down, the 1113(e) provisions, including the 21 percent pay cut, will be imposed. Understand that the imposition of the 1113(e) provisions would not be the end of this process. We would then be compelled to enter into 1113© discussions with the Company, which is a process that would establish long-term, permanent contract relief. According to our advisors, the long-term relief would likely contain provisions no better than the TA. We have been clearly advised that the 1113 process could produce provisions that would be far worse. If the TA is not approved, the likelihood of having even more draconian contract provisions imposed through an 1113© process continues to grow as the Company’s financial situation worsens due to increasing fuel prices and decreasing revenue.
Additionally, the Company can ask the court to impose other 1113(e) provisions during the time that the 1113© discussions are taking place.
Make no mistake—this TA is by far the worst set of working conditions that we have ever seen at this property. Just as our advisors predicted, things have gotten worse. Our democratic process has enabled a strategy, for better or worse, of staring down the Company at the table. If you have been keeping score through the exchange of proposals, you can judge for yourself how we have fared. I’ll leave it for zesty crew room discussions if a different strategy would have served us better.
But no amount of could of, would of, should of dialogue will change the attractiveness of what is before us and “we are where we are.†And if we are to believe our advisors, who have been batting a thousand with their predictions, as ugly as this TA is, and it is unquestionably ugly, it is far less onerous than what we would expect to see if we voted it down. The terms of the 1113(e) filing would immediately be upon us, and we would face an 1113© process that would attempt to extract even more economic value from labor – because there is no other source of funding for our company. Those believing that a merciful judge would intervene need to listen to our legal counsel to fully recognize the depth and complexity of our financial situation.
This is not a question of us deserving better; we do. It is, unfortunately, a question of whether or not you are willing to risk losing even more, potentially very much more.
Make your decision and cast your vote through the internet or email. The balloting period ends on Thursday, Oct. 21 at 10 a.m. ET.
Thanks for listening.
On Friday, Bankruptcy Judge Stephen Mitchell ruled in favor of the Company’s 1113(e) motion, granting immediate interim contractual relief on those unions without a ratified agreement in place. The judge stated that even though granting this relief on an interim basis would drastically disrupt the lives of thousands of employees by inflicting severe financial hardship, and even acknowledging that management had yet to take a pay cut commensurate with what it was seeking from labor, he nonetheless had to agree with the debtor in granting virtually everything they sought from the court. Judge Mitchell referred to US Airways as a “ticking fiscal time bomb†that would suffer a “meltdown†without the interim, court-imposed relief.
The interim relief imposed included an immediate across-the-board 21 percent pay cut, relief of the 279 minimum aircraft, 10 percent DC plan contributions, increasing the monthly flying cap to 95 hours, interim IAM outsourcing, and duration of imposed relief for four months. A copy of the order can be found on the pilots only home page under “Bankruptcy Information.â€
As we previously told you, ALPA was successful in negotiating a “wait and see†agreement with the Company. If the TA is voted up on October 21st, then the terms of the TA would retroactively supercede the terms of the interim relief granted by the Court. In other words, instead of a 21% pay cut from October 15th, ALPA would incur an 18 percent reduction as per the terms of the ratified TA. On the other hand, if the membership should vote down the TA, then we can look forward to the 21 percent reduction. Quite simply, it’s your choice.
I’ve noticed, from some of the questions that pilots have been asking at the roadshows, that there’s been some confusion regarding the differences between the 1113(e) and the 1113© process. It is important for pilots to know that if the TA is voted down, the 1113(e) provisions, including the 21 percent pay cut, will be imposed. Understand that the imposition of the 1113(e) provisions would not be the end of this process. We would then be compelled to enter into 1113© discussions with the Company, which is a process that would establish long-term, permanent contract relief. According to our advisors, the long-term relief would likely contain provisions no better than the TA. We have been clearly advised that the 1113 process could produce provisions that would be far worse. If the TA is not approved, the likelihood of having even more draconian contract provisions imposed through an 1113© process continues to grow as the Company’s financial situation worsens due to increasing fuel prices and decreasing revenue.
Additionally, the Company can ask the court to impose other 1113(e) provisions during the time that the 1113© discussions are taking place.
Make no mistake—this TA is by far the worst set of working conditions that we have ever seen at this property. Just as our advisors predicted, things have gotten worse. Our democratic process has enabled a strategy, for better or worse, of staring down the Company at the table. If you have been keeping score through the exchange of proposals, you can judge for yourself how we have fared. I’ll leave it for zesty crew room discussions if a different strategy would have served us better.
But no amount of could of, would of, should of dialogue will change the attractiveness of what is before us and “we are where we are.†And if we are to believe our advisors, who have been batting a thousand with their predictions, as ugly as this TA is, and it is unquestionably ugly, it is far less onerous than what we would expect to see if we voted it down. The terms of the 1113(e) filing would immediately be upon us, and we would face an 1113© process that would attempt to extract even more economic value from labor – because there is no other source of funding for our company. Those believing that a merciful judge would intervene need to listen to our legal counsel to fully recognize the depth and complexity of our financial situation.
This is not a question of us deserving better; we do. It is, unfortunately, a question of whether or not you are willing to risk losing even more, potentially very much more.
Make your decision and cast your vote through the internet or email. The balloting period ends on Thursday, Oct. 21 at 10 a.m. ET.
Thanks for listening.
