APA PHX Domicile Update: Nov. 15, 2014
Dear PHX Pilots,
As you are keenly aware, AAG management sent its “comprehensive economic proposal” to the APA on Tuesday of this week. This, after the APA granted American a thirty-day extension (at American's request) to the time-line found under the paragraph 27 of the MOU which called for cost-neutral arbitration to be offered if a Joint Collective Bargaining Agreement (JCBA) could not be negotiated within 30 days of APA being certified as the union for all pilots of the combined airline. Paragraph 27 of the MOU is shown here:
If and when the NMB makes a single-carrier finding, the organization certified to represent the pilots of the single carrier, the single carrier acknowledged by the NMB and the certified organization shall promptly engage or re-engage in negotiations to achieve a JCBA to be applicable to the carrier that will be the product of the Merger. In the event that such negotiations are not completed within 30 days of the NMB's certification, New American Airlines will offer final and binding interest arbitration under Section 7 of the RLA, and the organization will accept such proffer, to resolve once and for all the terms of the JCBA. The arbitration decision shall be issued no later than 60 days after the close of the 30-day negotiation period. A panel of three arbitrators led by Richard Bloch shall serve as the arbitrators for this process. If Arbitrator Bloch declines to serve in this capacity or is unable to resolve the parties’ dispute, the parties shall select another arbitrator. The arbitrator’s jurisdiction and award will be limited to fashioning provisions which are consistent with the terms of the MTA, including provisions which implement the terms of the MTA or facilitate the integration of pilots under the terms of the MTA. The arbitrator’s award specifically shall adhere to the economic terms of the MTA and shall not change the MTA’s Scope terms (Paragraph 25 of this Memorandum) or the modifications generated through the process set forth in Paragraph 24 of this Memorandum.
The extension was granted after the APA Board of Directors heard directly from Doug Parker in a meeting wherein he loosely outlined what we should expect the company to offer, but only after the conclusion of the flight attendant JCBA ratification vote on November 9. What was heard by the BOD was sufficient to grant the extension and high expectations were set for what would be received from the company when the time came. That time finally came on Tuesday and we believe the entire BOD, as well as every last AA pilot, was both disappointed and dismayed. This, especially in light of the letter preceding the release of the company's offer authored by Scott Kirby in which he outlined his plan to “establish trust with our employees” by dropping his request for SCOPE relief by way of increasing the maximum allowable capacity of jets flown by AA's regional affiliates from 76 to 81 seats. What happened next did anything but “establish trust” when the company's actual proposal objectively degraded our SCOPE clause far more (potentially costing far more jobs) than the offer we were led to expect.
There is a clear disconnect between Parker, Kirby, and the pilots of American Airlines. We believe management expected our pilots to be elated with their offer which included higher wages than those provided by the current agreement. Management values its offer well above the economics of the MTA, but overlooks the fact that the offer comes with a few seemingly inconsequential concessions. Those concessions are not at all inconsequential because it could well lead to fewer jobs and a degradation to the industry standard SCOPE, not only for AA pilots, but also for all major airlines. SCOPE is the foundation upon which the entirety of our contract is built. Rates of pay are irrelevant when your job has been outsourced to a regional airline competitor due to lack of SCOPE.
The pilots of Phoenix have reason to be especially indignant. We have watched Parker and Kirby go from leading America West, to attempting a merger with American Trans Air, to merging with US Airways (which was never fully completed after eight years), to an attempt to merge with Delta, followed by two attempts to merge with United, to finally being able to close a deal with American in 2013. Financially, the AA deal may have closed in short order but operational integration remains some time off into the future and past performance indicates there is more than a small chance that Parker and his team may never get there. It is vital to remember that Parker and Kirby would not be at the helm of the world's largest airline without the patient support of the AWA/US Airways pilots and most recently, the pilots of American Airlines. It is also critical to remember how close Parker and his team came to losing the deal when the former AA CEO presented his “stand alone” plan which began to gather steam, especially when it was supported by Bob Crandall. But for the robust support of APA and our former bargaining agent, the deal would likely have been lost. It appears that Parker and his team have already forgotten where they would be today without us.
So why is this apparently massive increase in the value of our contract insufficient at this time? Because that figure still falls well short of the value of Parker's and Kirby's stated goal of “beating Delta” in every metric (including employee compensation) and the many clear promises made that they would do so at the earliest opportunity. The unprecedented financial results of the airline prove that opportunity is upon us now, and it was those promises which led to the robust support from the pilot groups which ultimately led to these men taking control of the world's largest airline. There is no legitimate reason to delay making good on those promises today without requiring our pilots to pay for it by way of any concessions. The pay increase offered represents only a fraction of our pilots' investment in these men over the years, and not the other way around.
Given the offer as presented to the association and the alternative of cost-neutral arbitration, we were initially inclined to send the JCBA to arbitration, knowing that our SCOPE will not be degraded and that rates of pay will be increased in accordance with the “mid-contract adjustment” beginning January 1, 2016. If either Delta or United receive an increase before then, that increase could place the 2016 rates (and beyond) at or above those now being offered. When considering total compensation (pay, profit sharing, work rules and benefits), the company's current offer only closes the gap somewhat, but at a very high price. Notwithstanding the aforementioned, we do believe the company's offer was made in good faith and we can understand why it might be puzzled by the negative reaction. While Parker and Kirby have long been very highly compensated, they appear to have forgotten how long the pilots of Phoenix and US Airways have lagged the industry and may not realize just how far behind the legacy AA pilots have also become. It's not a matter of receiving a sizable raise one year ahead of schedule, but of receiving no raises whatsoever in the decade prior to this merger. The time is now and we should not be asked to give any more to get what we have patiently earned (and tried to negotiate) over many years.
After debating the company's offer and agreeing to a counterproposal, the APA BOD sent the Negotiating Committee to AA headquarters Friday morning to deliver it. In response, the company asked to meet again early next week to discuss APA's counteroffer and we are encouraged by this fact. A deal is not dead and it's not too late to strike a mutually beneficial deal as negotiations remain ongoing. The APA BOD will reconvene next week to see what develops and whether or not an acceptable contract can be reached rather than punting the JCBA to arbitration due to broken promises. We believe a negotiated settlement is still possible and is preferable to all parties. It would also allow the new American Airlines to show the world that it was truly serious about a positive cultural change and competent to make that happen. The window of opportunity for Parker and Kirby to close this deal and cement their legacy is small and closing. We hope that legacy will be one which will hold them in the highest regard of our membership.
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Fraternally,[/SIZE]
John and Eric
John Scherff
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PHX Chairman[/SIZE]
[SIZE=medium]PHX-Chair@alliedpilots.orgmailto:PHX-Chair@alliedpilots.org[/SIZE]
256-457-0801
Eric Ferguson
PHX Vice Chairm
