It's official!

[bigjets]

OK $80 million more than the aggregate based upon contracts that all become amendable by 2016 for a contract that doesn't become amendable till 2019.
 
Ok so divided by $21000 flight attendants that comes out to $3809.52 per year.
 
$80 million comes out to around 5.5% based on an average of $70k (including benefits etc) . Thats how much this contract would have put APFA above the market aggregate, but what happens from 2016 through 2019? Thats at least three years where all Delta and UAL need to get is 2%/year and APFA will be back at the bottom not including what the other FA's are likely to see in profit sharing.
 
How much Profit sharing did Delta workers get last year? I've heard of profit sharing numbers as high as 15% which would net them more than double the $3809. With multi billion dollar profits I doubt they will settle for 2% increases either. 
 
Blaming the Creditors Committee for the binding arbitration is weak, the Creditors Committee wanted this just as much as the Unions did, and if it was so essential then how come they didn't demand binding a binding arbitration agreement from the largest union on the property? I believe that after sitting in negotiations for four years the APFA wanted a defined timeline, they gave away far too much to get it. If they had said No the merger would have gone through anyway. 
 
Like I said, everybody seems to have forgotten what happened in the 90s.

So the apfa negotiated for a decent raise, but your concerned that delta might get another raise in 2016 making AA FA's not the highest paid anymore and the profit sharing in 2016 might be really good and put AA FA's further behind delta FA's in 2016.

By voting down the TA, the FA's will defiantly be behind the delta FA's until 2020,

Your logic is baffling.

The TWU on the other hand did nothing to get us an industry leading contract or even close, we will be living with this contract until 2018, then it's only amendable, then we negotiate for another couple of years because by that time there is mostly likely going to be another war or financial collapse or the like.

The apfa and APA were smart in getting the cash and contract improvements while the getting was good, and the TWU languishes with a bk contract that takes us through 2018, and the IAM gets a weak deal for its members, and they want to represent us without even taking a vote.

Thanks TWU


I picture bob saying in negotiations, we won't accept those contract improvements and $7 an raise because delta might get a raise 2 years from now. Maybe non union is the way to go.

 

[bigjets]

I agree thats where they are trying to take us.
 
We still have our sick time because we have a Union. Thats something. To me its worth nearly $30k.

Give me a break...........Coolaid drinker

 

[WorldTraveler]

OK $80 million more than the aggregate based upon contracts that all become amendable by 2016 for a contract that doesn't become amendable till 2019.
 
Ok so divided by 21000 flight attendants that comes out to $3809.52 per year.
 
$80 million comes out to around 5.5% based on an average of $70k (including benefits etc) . Thats how much this contract would have put APFA above the market aggregate, but what happens from 2016 through 2019? Thats at least three years where all Delta and UAL need to get is 2%/year and APFA will be back at the bottom not including what the other FA's are likely to see in profit sharing.
 
How much Profit sharing did Delta workers get last year? I've heard of profit sharing numbers as high as 15% which would net them more than double the $3809. With multi billion dollar profits I doubt they will settle for 2% increases either. 
 
Blaming the Creditors Committee for the binding arbitration is weak, the Creditors Committee wanted this just as much as the Unions did, and if it was so essential then how come they didn't demand binding a binding arbitration agreement from the largest union on the property? I believe that after sitting in negotiations for four years the APFA wanted a defined timeline, they gave away far too much to get it. If they had said No the merger would have gone through anyway. 
 
Like I said, everybody seems to have forgotten what happened in the 90s.

dead on, Bob.

It's amazing that some people want to vote down what you write despite how accurate it is.

Dug did his usual game of moving around 3 cups around the table in front of the creditors and union reps so that all were convinced they knew where the fortune was but the ones he most intended to mislead were the employees.

the fact that the unions refused to recognize what they were dealing with and take appropriate steps to protect their interests is mind-numbing.

Union leaders were motivated by their anger for nAAtive mgmt. and Doug played right into it, convincing them to sign an agreement that gave him advantages and take away their rights.

there was no need to sign away anything as part of the merger agreement - and if there were, then the merger wasn't a good thing for AA employees.

and, yes, Bob DL employees are on track to gain 15% of their salary in profit sharing this year - DL has already booked about 12% thru the 3rd quarter and paid 5% of it.

It is mind-blowing the number of AA advocates who continue to side with Parker in arguing that profit sharing is not worth it by refusing to acknowledge that the industry has not changed as a result of consolidation and that profits will be transitory.

the legacy airlines have been pushing for 35 years to get to a place where the industry is now - with fewer competitors who have similar costs and barriers to entry for carriers that are much lower cost just so that capacity can be kept under control and pricing kept firm.

The industry is there. ALL US airlines should be showing healthy profits, even while continuing to grow their own networks - including AA to Asia, DL in the west and much of the industry to Latin America etc.


With OPEC now saying they are willing to keep oil prices down for anywhere from 6 months or as long as several years, the US industry has an unprecedented ability to finish the process of consolidation. US carriers are the ones that are raking in the profits right now. European legacy carriers are really just getting into the major restructuring that US carriers did years ago while Asian carriers are having to come to grips with low cost competition on their regional networks.

there is no reason for any US airline employee to agree to give up profit sharing. The notion that they can get as much in scheduled pay increases as other employees receive in profit sharing is simply not grounded in reality.

 

[commavia]

Some people still don't get it.  NOT EVERYONE WANTS PROFIT SHARING.  Capisce?
 
In the context of the FAs, there is clearly a group of individuals who felt it was worthwhile to vote down the TA because it didn't include profit sharing.  Everyone was very clear that a no vote would result in a contract worth less in economic terms than the TA, but many voted no nonetheless.  Fine - that's their choice.  But there is also clearly a group - at least some of whom, apparently, are on this board - who actually preferred getting a higher raise in their paycheck each week instead of the possibility of profit sharing each year.
 
There is no "right" or "wrong" here.  It's an incredibly personal preference based on past experience, risk tolerance, etc.  But what I find "amazing" is that some people act as if anyone who doesn't want to gamble with profit sharing is an idiot.  I'm glad that the TWU, and certain airline forum know-it-alls, feel confident that the airlines are now essentially guaranteed to make huge profits in perpetuity and/or that "any monkey" can run an airline.  We'll see how that works out.

 

[WorldTraveler]

and what you don't get is that you can't get industry leading pay without it.

it's that simple.

profit sharing involves risk. but the risk has been eliminated in the airline industry more than has ever existed since deregulation.

yes, it is a personal decision - not unlike choosing to put your investments under your pillow vs. investing in the stock market. will the stock market go down at times? absolutely. however, over time it has been proven that people who are willing to take a certain amount of risk will gain more than those who take the "safe" course.

again, no one seems to question that WN has been able to be profitable for decades and pay very healthy profit sharing but now that the legacy carriers are doing the same thing, everyone wants to hold onto the first 30 years of deregulation in which the legacies fought mightily to coexist with WN and other legacies. now that the situation has been equalized, far too many people want to hold onto the past as if the whole purpose of BK was to solely cut employee costs. no, the purpose of BK was to restructure legacy airlines in order to compete - and many are. AA is one of them. While AA faces specific market challenges, AA will be profitable.

to argue that AA employees should not take the risk in order to obtain higher pay is simply buying into another version of Parker's philosophy which he successfully used to keep US employees paid well below their peers at other airlines for years. He would like to do the very same thing again.

 

[jimntx]

Bob Owens, you are beginning to sound like WorldTraveler.  We know what you think...profit sharing is better than food on the table because you might make a bunch extra.  You refuse to even consider reality--we had two choices, Yes or No.  No guaranteed an arbitrated contract that is worth millions less than the TA.  Now, if you want to join the tiresome posters club, just keep posting that we should have gotten profit sharing.  We didn't.  Some of us didn't want it.  We wanted money in the paycheck guaranteed--not a possibility of more if the current profits continue for 4 straight years--and how often has any airline besides Southwest had sustained profits over a long period of time?
 
Now, since you are not a flight attendant, and as far as I know, never have been, how about butt out of our discussions. Go back to explaining to the TWU membership that you had nothing to do with the multiple times that the TWU has screwed over its membership by rolling over and playing puppy for the company.

 

[Kev3188]

How much Profit sharing did Delta workers get last year? I've heard of profit sharing numbers as high as 15%

IIRC, it came out to 8.2% of one's earnings? The 15% you heard may have been referring to the percentage of profits that are set aside for payouts. That's been amended to 10% (if below a 2B threshold), and 15% (if over) for this year.

 

[Kev3188]

and what you don't get is that you can't get industry leading pay without it.

Sure ya can. You are confusing "pay" (or base rates) with total compensation. For those that have the benefit of representation, you can negotiate an industry leading base rate. WN agents just did it. You can-and should- also negotiate for both industry leading 401k contributions & matching. We can also add caps to employee-borne medical costs, improvements to sick/OJI/vacation accruals, inclusive lunches, and more.

All get you there without chasing a carrot that may or not be there come full year earnings time.

 

[Bob Owens]

 
Well, okay, but again - "what happens from 2016 through 2019" wasn't really on the ballot.  As has been explained countless times - the AA FAs only had two choices: the TA or binding arbitration guaranteed to be worth less in the aggregate.  Those were the only two choices.
 

It was on the ballot because the deal doesn't become amendable till 2019. Guaranteed based on what? How can you say anything in this industry is guaranteed? Anytime a company wants to get out of a labor contract all they have to do is get together with other companies they deal with where they accept equity in exchange for cash on a dollar for dollar exchange, file BK and screw over their workers, however their is no way for the next five years for the FAs to improve their contract. 
 

 
 
 
There are pros and cons to profit sharing.  The APFA leadership, and many FAs, clearly believe that given their past experience and personal risk tolerance, they would prefer the certainty of money in their regular pay check rather than the chance of profit sharing down the road.
 
It's great in times of profit, and it appears that some believe profits will be infinite going forward.  I'm a bit more skeptical.

Iagree there are pros and cons, and if they are not tolerant to risk then they are in the wrong industry. As I explained already there is no such thing as certainty in this industry, the company always has an avenue out but the Union does not. If things did turn to crap the company can come bcd for more but if the company earns trillions in profits the FAs can get a penny more for at least five years under the TA. 
 
Will these profits be infinite? No, of course not, these things run in cycles, the cycle is on an upswing and this deal sets their terms based on the lowest point of the cycle and locks them in for five years, when more than likely the cycle will start swinging the other way. Thats the same exact mistake we made in the 90s when we agreed to long term concessionary deals that locked us out of the greatest economic expansion in history. 
 
 

 


Fascinating that Laura Glading (among many others) "read the room" differently when discussing and negotiating with the UCC.
 
 

 
Perhaps, given past history, the UCC felt a bit more confident about it's ability to get a "competitive" joint contract with the TWU than with the APA or APFA?
 

Guess she isn't a good poker player, did you expect them to give away their position without trying to capitalize on the fact that the unions already showed their hands? Why wouldn't they want them to merge? The merger greatly increased the size and value of the company they were going to own and it eliminated a great deal of competition within the industry which further enhanced the likelihood that they would see enormous gains, which they did. 
 
 
 

And that's certainly an understandable and reasonable perspective - no doubt shared by many flight attendants.  Unfortunately, the time to have affected a change to the APFA's negotiating strategy would have been 18-24 months ago.  By the time November 2014 rolled around, the die was cast - for better or worse.  The APFA agreed to binding arbitration and as such the FAs had only two choices in front of them.  There was no mystery curtain #3 to peak behind.
 

Perhaps the the ME Too clauses are most certainly reasonable, after all if the contract was to be based upon "market Aggregate" then there has to be a provision to recognize that figure is subject to change, in the rejected TA they agreed to ignore that based upon the extra $80 million, but the membership rejected that. The company already has a process to adjust wages based upon a favorable(for the company) narrow perspective of the market and included somewhat similar language in the IAM agreement which was struck by this management team so their argument against it would be weak. 
 

 
Indeed.  "Everybody" (i.e., some) seem to have forgotten how bad the airline industry was doing in the early 1990s - when it lost the most money in its history up to that point.  Not sure how everyone would have felt then about having forgone bigger paychecks in exchange for non-existent profit sharing.
 

Thats just it, their paycheck in 2019 won't be any bigger than it is now after paying for medical and inflation, but the company will most likely have completed several years of billion dollar double digit margins. We had profit sharing through those years and had short two or three year contracts, then we signed a concessionary six year contract the year the industry turned around and became more profitable than they had ever been up to that point. Very similar to what we are seeing now. 
 
This deal was a bad deal. It was bad because it locks them in for five years with raises that are substandard for the condition of the industry. Do you really think that UAL and CAL are going to agree to 2% annual increases till 2019 when the company is rolling in billion dollar profits? 

 

[WorldTraveler]

the 15% is what DL has set aside for profit sharing thru the 3rd quarter PLUS what was in their investor guidance for the 4th quarter.

As with any financial projection, guidance can be changed - and that is precisely why DL's investor day next week should provide a lot of color on DL's RASM expectations, fuel cost and hedge positions, plus profit sharing.

and jim,
again, you can hold onto the notion that profit sharing MIGHT be paid but now that DL employees have accumulated $2.5 BILLION dollars in profit sharing since DL's emergence, UA has a program that has been paying out even with UA's lower financial performance relative to DL and AA, and WN employees have been consistently earning it, it is incredible to think that legacy airlines can't or shouldn't participate in it.

cling to the past and old ideas at the peril of your own finances.

it is incredible that you lambast your colleagues for voting against the TA for elements which provide far less upside than the amount of profit sharing DL FAs will get but defend Parker and the APFA for their stand on profit sharing.

Kev,
WN employees had industry leading pay and all of those bennies BEFORE the TA and before the legacy carriers increased their own employees' pay.

For keeping those bennies, WN employees have netted the smallest pay raises in the industry so far.

Bob is absolutely right that AA didn't even have to file for BK to force cuts on its employees in 2003. TO think that pay is guaranteed via a contract is very naïve.

the bottom could fall out tomorrow. TO try to hold onto "guaranteed pay" tomorrow while passing up increased pay today is sheer foolishness - and exactly what Parker wants.

 

[john john]

Yep. Without a union, you might actually be paid like DL is.

Or you could be pay like a HP agent or a temporary employee outsourced AA and DL Passenger Service Agents

 

[Kev3188]

Kev,
WN employees had industry leading pay and all of those bennies BEFORE the TA and before the legacy carriers increased their own employees' pay.

And they still have it. Wasn't me that was posting about "industry leading pay"...

For keeping those bennies, WN employees have netted the smallest pay raises in the industry so far.

And if they're still the highest paid, what difference does that make?

the bottom could fall out tomorrow.

Of course it could. Anyone that's been around more than a few years knows this. All the more reason to take as much as you can negotiate in compensation NOW, and leave the "hope" of a PS check that may or may not come to others...

 

[commavia]

Guaranteed based on what? How can you say anything in this industry is guaranteed?

 
Oh boy.  The same question asked and answered repeatedly.  Wow.
 
It was "guaranteed" that the value of any contract imposed in binding arbitration would be less than the value of the TA because that's the process both the company and the union agreed to.  Both parties signed a negotiation protocol that established the value of any contract the arbitrator would be permitted to establish ($112M annually over the combined value of our current contracts), and both parties also agreed on the value of the TA ($193M over the combined value of our current contracts).  193-112 - this isn't difficult math.
 
Rather than multiple people explaining this over and over, perhaps it would be easier to just go and watch the APFA's own YouTube videos?  That will answer all of these questions, and then some.

 

[Bob Owens]

Bob Owens, you are beginning to sound like WorldTraveler.  We know what you think...profit sharing is better than food on the table because you might make a bunch extra.  You refuse to even consider reality--we had two choices, Yes or No.  No guaranteed an arbitrated contract that is worth millions less than the TA.  Now, if you want to join the tiresome posters club, just keep posting that we should have gotten profit sharing.  We didn't.  Some of us didn't want it.  We wanted money in the paycheck guaranteed--not a possibility of more if the current profits continue for 4 straight years--and how often has any airline besides Southwest had sustained profits over a long period of time?

 
No thats not what I think, I think long contracts are bad deals but if you are going to get stuck in one at least have some means of getting a share of the profits and a means to adjust your pay up to others. There really are no guarantees for labor anymore when a company with plenty of money can jump into BK and get labor deals voided because they want to be the most profitable in the industry, (as long as they also claim they need to be the most profitable for long term survival without much substantiation needed). AA never said they were broke in BK, they never claimed that our concessions were necessary to prevent imminent financial collapse, they even indirectly told the Judge that if they can get the concessions they would be earning $2.8 billion a year in profits, making them more profitable than any other carrier. 
 
How many years was AA profitable in the 90s? How many times will you keep making the same mistakes and still keep seeking security in an industry that is inherently insecure? 
 
Hopefully your Union will make a good argument in arbitration and get the ME Too clauses, then you might get the pilots to save you from yourselves, or maybe they will get a real industry leading contract, not one that averages out to 3% a year while the company takes back every penny through medical premiums. 
 
While I don't think that profits will be perpetually in the Billions forever they will be there for a while, there have been fundamental changes to the industry where the top four carriers control 90% of the market. Its never been that way before. The carriers have become so large and so profitable that they can wipe out any upstart that dares to challenge them. In bankruptcy they have won the ability to alter the size of the company (and labor force) up or down to match demand. How long will this last? Until the government has decided that they have gouged the public enough and too many areas have lost service. 

 

[Bob Owens]

For keeping those bennies, WN employees have netted the smallest pay raises in the industry so far.

 

So let me get this right, in your book you are better off being a Delta mechanic earning $38/hr and getting a 5% pay raise than to be a SWA mechanic earning  $45 and only get a 3% increase? The SWA kept superior benefits and superior compensation, Delta employees don't even come close.