Here's the actual DFW update and not the doctored version luvthe9 posted earlier:
APA DFW Local Update (Today's DFW Domicile Meeting): April 20, 2012
Hello everyone,
This is pretty long but I wanted to get as much detail as I could. I attended the DFW Domicile Meeting today and I have to say that I am impressed with what APA has put together here. I am going to try to condense 7 pages of notes into one coherent email but before I start I want to opine a bit. It is a given that labor does not like mergers/acquisitions/buyouts etc. so not only is this an unprecedented event in labor history with 3 major unions throwing their support to Doug Parker but it is the ultimate vote of no confidence in Tom Horton
and his AMR management team.
As soon as Rusty made it clear that Parker and Scott Kirby would be bringing their management team to Centerport to run the new American Airlines the room erupted in applause. I would guess there were between 250 and 300 pilots there SRO and everyone was enthusiastic about this plan. So with that in mind I will run through my notes in no particular order.
This is not a done deal but the first step. What has to happen is that LCC (US Airways stock ticker) must convince the Unsecured Creditors Committee (UCC) that this plan is better than Horton’s. The UCC set this up when they agreed to allow Horton another 180 days of exclusivity that should a competing offer appear it is up to Horton to prove that his plan is the better of the two instead of the usual onus being put on the competing offer.
Before Russ went into detail on APA’s concerns with AMR’s business plan (the same cornerstone plan from 2009 with the added gouging of labor) he commented on a briefing that APA got from the DAL MEC who told the Board to Focus on the business plan. APA has come to the conclusion that Horton’s business plan is over optimistic and it fails to allow for any competitive response from DAL and UAL. While it paints a rosy picture out 3-5 years it doesn’t speak to the interim. He went on to talk about AMR’s inability to execute on anything and commented that 2 years ago APA approached management with a proposal to purchase JetBlue and management refused to act because no one wants to make a decision.
The final comment here was that a flawed business plan and an inability to execute will put us right back here in a couple of years.
Expect Horton to fight back and don’t be surprised if he backs off his 1113 positions. APA’s position is that we are no longer interested in dealing with Horton regardless of what he offers because of the business plan.
At that point Russ brought out a cactus plant and reminded everyone that it is “bring a cactus to work day” which got another round of applause.
Russ gave us a timeline of how the deal went down. LCC presented their proposal to Lazard, Inc who is working with APA who then recommended that Bates meet with them. That in turn led to 11 days of negotiations which accomplished more than 5 years of negotiating with AMR. They came up with a basis for a contract. What will happen is that should this all be approved both sides will take 60 days to convert this into a TA that we can vote on.
So here it is (this will apply to all three groups, us, the east and the west)
6 yr contract.
Pay:
Pay bands but the A319 will be in the narrow body band.
5.5% pay increase DOS
3% yearly years 2-6
Parity with UAL/DAL by at the end of the contract
Vacation becomes 3:40 per day with increased accrual
Hard freeze on the A-Fund and a 14% DC plan of some sort
Scheduling:
MALV (max avg line value) 83 hours
Pick up to 90
Keep duty rigs E-F-G time
Scope:
110% of the narrow body fleet up to 81 seats
Tail # specific and it will be 2 for 1 i.e. two 81 seat jets to the commuter operation nets one new jet to the mainline. Domestic code share would be limited to 4% total which would be equal to 25% of JetBlue’s operation.
Furlough protection for the most junior active pilot.
There will be fences but they are still to be negotiated.
Seniority:
Russ stated that the integration would be painful but then went on to say that McCaskill-Bond would apply and the retirement demographics would be favorable to us. (I guess the US Air guys are older than us).
In closing his presentation Russ said that APA was optimistic that this was doable and that the LCC plan was viable and good for everyone. By consolidating we help stabilize the industry, we elevate the lowest paid legacy pilots (East and West) to industry standard and we support both UAL and DAL in their negotiations.
At that point Dave Bates addressed the meeting for about 30 minutes.
His high points:
Have an open mind and get informed. Said APA was about to start putting out lots of info. The APA BOD supports this unanimously 18-0. Parker and Kirby have a master plan with global vision and they can execute.
Reiterated that AMR management does nothing and takes no risks while Parker and Co. wants to solve problems.
Said that there will be a new TTOT system as well as a new reserve system and PBS. PBS can work the west guys are happy with it. Said this is the right thing for AA and LCC, employees and the industry.
As far as representation goes it will be APA, the NMB is ready to move on that as soon as we get approval and there most likely won’t be a vote because it will be a “friendly” takeover from USAPA.
Dave went on to talk about how badly the AW-LCC seniority merger was done and said that this will be the opportunity to fix this for once and for all. It will fall under McCaskill-Bond which means it will be a 3 member board that decides if we can’t negotiate a deal and it will stick. There will be some kind of hard fence for wide body pilots.
Said the Boeing order will stand because they want the wide bodies for ex[pansion, especially the 777-300’s. They also want to get out of the
50 seat jet business.
No change to sick
What happens with Eagle is still to be decided.
There will be seat pay protection in case of displacements. Example 767 captain displaced to 737 will still get 767 pay.
After Dave left it was back to Q&A with Rusty and Russ and I asked Rusty about the seniority merge and the Nicolau award. Dave had basically said it was not a factor but Rusty wasn’t sure said the lawyers had differing opinions on it but said it should come out to where if you are at the 50 percentile point on your fleet your combined seniority number would put you at that place. Said that this along with seat pay protection might solve the Supp CC problem but if not then it would be decided by another 3 person panel.
Since LCC will be folded into AA and become part of oneworld the question came up as to what happens to oneworld since Horton is president and the answer was that we assume that since you have to be president of one of the member airlines to be president of oneworld Horton will be out of that job too.
The burden of proof is now going to be on Horton and the UCC is very wary of a labor war.
In the end this merger is going to happen no matter what but this gives us the chance to exercise leverage and do it on our terms as opposed to being ripped by Horton’s 1113 and then have Horton turn around and buy LCC after we emerge from Ch11 with Horton maintaining control.
Finally Dave, Rusty and Russ at some point all said this:
Everyone we talk to must understand that the entire pilot group is 100% in favor of this so we need to sell it to everyone we interact with. At the same time expect management to react in a hostile manner so don’t go off and end up as a hostage.
So there you have it. Hopefully I haven’t mangled anything too badly but I have to say that I am pleasantly impressed with what APA has done. We’ll see where it goes from here.
_,_._,___
