US Airways Flight Attendants Outraged by Management Pay Increases

[700UW]

US Airways Flight Attendants Outraged by Management Pay Increases
Monday August 7, 12:13 pm ET
Management Continues Demand for Cost-Neutral Contract

PHOENIX, Aug. 7 /PRNewswire/ -- While flight attendants from US Airways and America West, both represented by the Association of Flight Attendants-CWA (AFA-CWA), are striving in negotiations to reach a combined contract, the company announced last week that a three percent pay increase for management will take place this fall. This disturbing announcement comes at a time when management continues to insist at the bargaining table that the merged flight attendant contract include zero cost increases, or in other words, takes the worst from both contracts and merges them into one.

"This hypocritical posturing by Parker and his management team for a cost- neutral contract must stop now," said Gary Richardson, America West Master Executive Council President. "The flight attendants at the new US Airways are as integral to the success of this company as any other employee group, including management. We deserve and expect fair enhancements to our wages and working conditions. And yes, we are ready, willing and able to take the steps necessary to secure those enhancements." The majority of America West Flight Attendants have not had a pay increase since their contract became amendable in May, 2004.

Negotiations have been largely unproductive, leaving even non-economic issues unresolved due to management's insistence on the worst of both contracts.

In addition to giving raises to management, CEO Doug Parker cashed in approximately nine million in stock options, and issued the following statement concerning the management increases: "The past year has been more challenging and more successful than many of us anticipated going into the US Airways/America West merger. Today, we are on track for a profitable 2006, even with transition-related expense and with continued high fuel costs and that is good news...I'm delighted that we're in a position to offer increases."

"US Airways flight attendants gave over $154 million per year in contract concessions, including the forced termination of our pensions, in order for the airline to survive and be a partner in the merger," said Mike Flores, US Airways Master Executive Council President. "And now, this management team, who are giving themselves raises and cashing in their stock options hand over fist, demands that our hard work and sacrifice remain unrecognized. It was on the backs of the flight attendants that this merger has been successful, and we are determined that we will obtain a merged contract with improvements in working conditions, benefits and compensation. Our paltry profit sharing yields us at the very best less than three percent of our annual givebacks."

For over 60 years, the Association of Flight Attendants has been serving as the voice for flight attendants in the workplace, in the aviation industry, in the media and on Capitol Hill. More than 55,000 flight attendants at 20 airlines come together to form AFA-CWA, the world's largest flight attendant union. AFA is part of the 700,000-member strong Communications Workers of America (CWA), AFL-CIO. Visit us at http://www.afanet.org.




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Source: Association of Flight Attendants-CWA, AFL-CIO

 

[Lovethesun]

The sad part is the USAirways East Flight Attendants gave up so much and then when it comes to the profit sharing the MEC decides to split the money with the west flight attendants. Something wrong with this picture for sure. Has anyone heard the reason behind the east MEC voting to do this to the same flight attendants that they are to represent.

 

[aredeeyou22]

The sad part is the USAirways East Flight Attendants gave up so much and then when it comes to the profit sharing the MEC decides to split the money with the west flight attendants. Something wrong with this picture for sure. Has anyone heard the reason behind the east MEC voting to do this to the same flight attendants that they are to represent.

Exactly. We did give up so much. Three times. Again, as I have said before, I am not running around expecting to get everything back just because we turned a profit. But the FA group needs to be made aware of the severity of what is happening. This mgmt team actually is SERIOUS about us taking more concessions (from BOTH EAST AND WEST) as we merge the contracts, maintaining a "COST NEUTRAL" environment. Let's deal with the problems in the AFA70, but let's make this painfully clear to our membership that this absolutely cannot and will not be tolerated. Be outraged.

Thank you.

 

[wench]

I have formed my opinion of those at Tempe.

CWA pay raise, in effect Aug 1st.
We ARE NOT LOSING flights, YET Tempe is pressuring our station mgr to cut Part time hours..

Spoke with union rep about this...


The troops have figured this is the only logical reason since the raise is in effect, this cut takes place with the Sept 11th bid..

Union agreed..So, My opinion of this new group of mgmt..
Similar to those of past..

Slithering snakes. all of them. :down:

 

[awausairtech]

I have formed my opinion of those at Tempe.

CWA pay raise, in effect Aug 1st.
We ARE NOT LOSING flights, YET Tempe is pressuring our station mgr to cut Part time hours..

Spoke with union rep about this...
The troops have figured this is the only logical reason since the raise is in effect, this cut takes place with the Sept 11th bid..

Union agreed..So, My opinion of this new group of mgmt..
Similar to those of past..

Slithering snakes. all of them. :down:

ARE WE NOT ONE AT THIS TIME........
AT YOU EAST ONLY ME BOYS AND GIRLDS..

 

[luvn737s]

The sad part is the USAirways East Flight Attendants gave up so much and then when it comes to the profit sharing the MEC decides to split the money with the west flight attendants. Something wrong with this picture for sure. Has anyone heard the reason behind the east MEC voting to do this to the same flight attendants that they are to represent.

How much of the profit was allocated from East on a per employee basis versus the total profit distributed among all the FA's? What does the dollar value (loss) come to?

 

[BoeingBoy]

What does the dollar value (loss) come to?

Until the amount to be divided among the F/A's is known, it's impossible to know the dollar effect. Percentage-wise, though, all you need is the number of East & West F/A's - assuming that whatever there is to split will be split evenly.

Ballpark guess - 35% reduction.

Jim

 

[SKY HIGH]

SEE THE AFA E-LINE EVERYONE?

MEC President's Response to Doug's Letter


Dear Members,
Mr. Doug Parker
Chairman of the Board and CEO, US Airways Group
4000 E. Sky Harbor Blvd.
Phoenix, AZ. 85034


Dear Mr. Parker,

On behalf of the members of the Association of Flight Attendants (East), I am writing this letter to let you know that we are not happy with the recent financial transactions that you and various senior executives have exercised in the last two months. We are also not happy with the tone and content of your letter to the employees of US Airways explaining your position with regard to your particular transactions (Ed. Note; Mr. Parkers letter can be read HERE). Furthermore, the decision to implement annual 3% merit raises to certain non contract employees seems at odds with your previous statement to me and others that, "the merger only works if all merged labor contracts remain cost neutral".

This letter will be posted on our website and sent to all US Airways East Flight Attendants. I will personally provide you with a hard copy on Monday at the Labor Advisory Committee's Quarterly meeting.

With respect to the stock option transactions I am very disturbed with your explanation of the facts surrounding the stock grants, their expiration dates and the need to move now in order to diversify your portfolio. The recent transactions by yourself, Mr. Kirby, Mr. McClelland, Mr. Kerr, Mr. Walsh, and Ms. Eberwein all resulted in millions of dollars in profit for yourself and the aforementioned executives. In your case alone, the gain was approximately nine million dollars.

Doug, I am not naïve. I realize that CEO's and senior VP's are going to make more than rank and file employees. I also realize that compensation packages that include stock options in lieu of salary are a risk. Trust me; no one knows more about gambling on US Airways stock than the rank and file employees of US Airways. As I have told you before, I personally have been burned by US Airways stock three times; twice by owning it and having it wiped out in two bankruptcies and now by being excluded from equity participation as a result of the second bankruptcy.

Your letter also states that, "all of these options were granted to me during my time at America West" and you go on to say "…while these stock option exercises/sales will result in some meaningful cash payments to me no cash comes directly from US Airways." Clearly we travel in different circles, as that is the first time I have ever heard someone describe a nine million dollar gain simply as "meaningful". While you are technically correct that the price of the stock at the time of the sale is the result of the market and the money does not come from US Airways, in reality that is not so. I believe the employees of US Airways are US Airways.

As you have said previously many times, without the merger of the two companies, America West would have in all likelihood found itself in bankruptcy. Absent the merger then, a trip to bankruptcy court would have rendered all of the stock options held by former America West executives worthless. The primary reason US Airways was able to exit bankruptcy was the fact that the employees gave the company over one billion dollars in annual cost savings. In fact, AFA alone gave over 150 million in annual cost savings through wage and benefit reductions, work rule changes and the forced termination of our pension. The combined cost savings and the merger produced the investment necessary to save both airlines. While there may not have been a cost associated to the corporation for the stock exercises/sales there most certainly was a cost to the employees of US Airways who provided the basis for former America West executives to be in the position of luxury you now find yourselves in. Good timing, I guess.

Your letter also explains that if options are not exercised before their expiration date, "they simply go away". While I will agree it would not be prudent to allow options to expire, I am confused with your statements that the sale of the options does not mean you think, "US Airways is topping out but (rather) we are just getting started". If that is the case then my confusion lies with your decision to exercise over 272,000 shares when only 24,750 shares, or less than 10% of the shares exercised, were due to expire this year. The vast majority of the shares sold by you and the other executives since June had expiration dates ranging from 2012 through 2015. I realize that you and others all still hold additional options but don't find it the least bit comforting to know that you aren't going to exercise any more options in 2006.

It is too late to make a long story short but the belief of my membership is that the merger created a windfall for a select few and that windfall was derived from the sacrifices of others.

The decision to implement annual 3% merit raises for non contract employees will clearly raises cost for the corporation but as you said in a letter to the affected employees you were "delighted to be in a position to offer these increases" and attributed the decision to the greater than expected successes of the merger and the overall profit outlook for 2006. It sounds as if you are saying the company can afford it because we are profitable. You also stated that contract employees, "have their annual pay increases implemented as part of their contracts." While that is a true, I am compelled to detail publicly what the AFA East contract provides for in terms of contractual pay raises:
2007 - 1% raise
2008 - 2% raise
2009 - 2% raise
2010 - 1% raise
2011 - 1% raise
2012 - 3% raise
Under the current contract it will take AFA East members 6 years to return to the wages they were earning in 2004 prior to the bankruptcy. AFA West members currently have no increases in their contract as their Section 6 negotiations have been recessed in order work on a merged contract. You have indicated in past statements that this is all a negotiated process and in order to increase pay, other areas of the two contracts would have to incur reductions in order to keep the costs neutral. My question to you is this; in order to allow the 3% increase for non contract employees are you reducing their vacation, sick pay and other benefits to make up the difference? I think not.

In closing your letter to the non contract employees you said, "We have a lot of challenges ahead, but I am optimistic that we're up to meeting and exceeding our customers' expectations."

Indeed the challenges are many. One of them is that this airline is now global in scope. Are you aware that on any given business day there is only a five hour window when both the East and West managers and employees are working simultaneously during normal business hours? This fact is causing problems with benefit and travel questions for my membership as well as operational decisions. I hope this management is addressing this challenge.

The other challenge is for management to realize that their employees are no different than their customers. This management must also meet and exceed our expectations or we will all fail. At the moment I just don't see that happening. Serving pizza and ice cream in the crew room, while a nice gesture, simply won't get it done.

So that's it Doug. We have a problem and I wanted you to know about it.

Respectfully,



Mike Flores,
MEC President
AFA-CWA

 

[ringmaruf]

Until the amount to be divided among the F/A's is known, it's impossible to know the dollar effect. Percentage-wise, though, all you need is the number of East & West F/A's - assuming that whatever there is to split will be split evenly.

Ballpark guess - 35% reduction.

Jim

And, of course, depends on how many East flight attendants will be receiving the profit sharing.

After all, you must remember that AFA (ditto for ALPA) gets to decide if employees furloughed during the year do or do not get to participate in the profit sharing. In particular, AFA and ALPA will get to decide if the MidAtlantic crew members furloughed this year will get any profit sharing.

Anybody think they will? Yeah, I thought not.

 

[BoeingBoy]

And, of course, depends on how many East flight attendants will be receiving the profit sharing.

You are, of course, right. As to the rest, that's for the F/A's to fight out.

I just "guessed" that there were 60 West F/A's for every 100 East F/A's. Actual numbers may, of course, be different.

Jim

 

[PITbull]

The sad part is the USAirways East Flight Attendants gave up so much and then when it comes to the profit sharing the MEC decides to split the money with the west flight attendants. Something wrong with this picture for sure. Has anyone heard the reason behind the east MEC voting to do this to the same flight attendants that they are to represent.

The MECP East is/was to put something out regarding that MEC vote to dilute the East profit sharing and folding the West f/as into that provsion. This profit sharing provision is directly related to the concessions given by the East; the West did not give concessions to their contract and do not have profit sharing. This what the West should be demanding from Doug, but the East just made Dougs responsibility, theirs.

He will spin some damn thing to make some lame justification for giving up the only monetary piece left in the East contract through 2012.

And, of course, depends on how many East flight attendants will be receiving the profit sharing.

After all, you must remember that AFA (ditto for ALPA) gets to decide if employees furloughed during the year do or do not get to participate in the profit sharing. In particular, AFA and ALPA will get to decide if the MidAtlantic crew members furloughed this year will get any profit sharing.

Anybody think they will? Yeah, I thought not.

Again, the profits sharing is tied to the East concessions. MAA were not included in any concessions for 2004 during the second BK. If they are furloughed from MAA and now at AWA, they will be included because the provision was extended by the East MEC to AWA f/as. If those f/as are furloughed again, they probably will not.

How much of the profit was allocated from East on a per employee basis versus the total profit distributed among all the FA's? What does the dollar value (loss) come to?

$36million is set aside for the employees for the purpose of profit sharing. Out of that pie, AFA receives 14.5% which comes to approx. $4.5 million. This was to be for the 5,000 f/as from the East to share depending on their w-2, not everyone will receive the same amount.

However, the MEC voted to include the 3,000 f/as from the west, so now that 14.5% is split among 8,000 f/as the amount, same as the East, on their W-2.

 

[ringmaruf]

Again, the profits sharing is tied to the East concessions. MAA were not included in any concessions for 2004 during the second BK.

An individual flight attendant’s profit sharing payment will be based on such flight attendant’s gross W-2 earnings (prior to any elective deferrals) for the prior calendar year divided by the gross W-2 earnings (prior to any elective deferrals) of all eligible flight attendants for the prior calendar year. “Eligible flight attendantsâ€￾ may include retired or furloughed flight attendants who had gross W-2 earnings (prior to any elective deferrals) for the prior calendar year, subject to applicable law.

Exactly what part of that language from the AFA contract explicitly excludes MidAtlantic flight attendants from receiving profit sharing?

Are they not furloughed flight attendants who had gross W-2 earnings while working on the mainline US certificate? Then it would seem that while denying them profit sharing is certainly permitted by the contract, doing so would be completely at the option of the mainline AFA MEC, not because the contract forbids it.

 

[PITbull]

An individual flight attendant’s profit sharing payment will be based on such flight attendant’s gross W-2 earnings (prior to any elective deferrals) for the prior calendar year divided by the gross W-2 earnings (prior to any elective deferrals) of all eligible flight attendants for the prior calendar year. “Eligible flight attendantsâ€￾ may include retired or furloughed flight attendants who had gross W-2 earnings (prior to any elective deferrals) for the prior calendar year, subject to applicable law.

Exactly what part of that language from the AFA contract explicitly excludes MidAtlantic flight attendants from receiving profit sharing?

Are they not furloughed flight attendants who had gross W-2 earnings while working on the mainline US certificate? Then it would seem that while denying them profit sharing is certainly permitted by the contract, doing so would be completely at the option of the mainline AFA MEC, not because the contract forbids it.

I'm sorry, were the MAA f/as working under the USAirways mainline contract that houses that provision. I'm sure you have the answer.

MAA f/as are considerd INVOL furloughees. the furlough language is in regard to VF furloughs and VFLR. The only furloughees that would be considered are the July 2006 VFLR awardees who worked actively during the first two quarters 2006 on mainline.

As far as who the AFA MEC East wants to distribute to, they could include all of the wholly-owned Express f/as if they wanted to.

 

[ilg30/7]

$36million is set aside for the employees for the purpose of profit sharing. Out of that pie, AFA receives 14.5% which comes to approx. $4.5 million. This was to be for the 5,000 f/as from the East to share depending on their w-2, not everyone will receive the same amount.

However, the MEC voted to include the 3,000 f/as from the west, so now that 14.5% is split among 8,000 f/as the amount, same as the East, on their W-2.

Again, that $36 million figure is based on the total profit of both the East and the West operations. If US East f/a's want to exclude the West f/a's from the profit sharing plan, the West profits should be excluded from the profit sharing formula.

 

[PITbull]

Again, that $36 million figure is based on the total profit of both the East and the West operations. If US East f/a's want to exclude the West f/a's from the profit sharing plan, the West profits should be excluded from the profit sharing formula.

I agree. East is $247 million and West is $68 million.

That should have been the appropriate way to handle this with your boy providing what % of the $68 million would be the West f/as and provide the appropriate language for their profit sharing until a negotiated transition agreement is achieved.