Negotiating Update for Nov. 11, 2011
Negotiations continued this week in the Dallas/Fort Worth area. All outstanding contractual issues are finally on the table. We continue to work hard to move the process forward, but as previously briefed on multiple occasions, large gaps still remain in many areas, including compensation, domestic codesharing, phased-in productivity tied to growth, a new hire pension structure, sick and vacation.
Talks were productive in some respects, as we narrowed the gap on issues that are close to agreement, such as the daily filling of open time and a new premium pay structure. But they have been discouraging in other ways, as senior management is still entrenched in their desire for more domestic codesharing exceptions, sub-standard compensation for the A319, a B-scale new hire pension structure (for the first 12 years of a pilots career) and service level agreements. In return, they are offering minimal increases in compensation and no improvements in vacation or sick.
Regarding compensation, senior management has proposed that each pilot will receive 3.21 percent (either as a lump-sum, structural increase, or a combination) in year one and annual pay increases of 1 percent (based on the May 1, 2008 day rates) in years two, three and four. They also propose to eliminate international override and redeploy night pay to fund an increase in per diem. In the aggregate, the pay proposal results in a total compensation increase of three to four percent (depending on aircraft) after four years, with an A319 pay freeze for the first two years.
We estimate senior managements proposals amount to a concessionary contract valued at approximately $100,000,000 per year in cost savings for the company -- and thats without accounting for the value of any of senior managements scope proposals.
The APA Board of Directors is scheduled to continue its fall meeting next week, beginning on Tuesday. The Negotiating Committee will spend the week reviewing the status of negotiations with the Board, and discussing how to proceed going forward. The committee -- which has negotiated every week without a break since June -- plans to take a much-needed break the week of Thanksgiving. We remain available to meet with senior management in an effort to bring these negotiations to a successful conclusion and will update you as soon as we have further scheduled negotiating sessions.