What's up with the VC language, does everyone get a week back?
It reads like they are giving you a 3 month window to retain full prefunding retiree benefits, they should get the money for the pay increases through more attrition, any thoughts?
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A quick summary of major and noteworthy events since the start of negotiations
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October 26, 2011
American Airlines and the Transport Workers Union have reached a tentative agreement in principle for the Fleet Service and Ground Service employees.
This tentative agreement provides our Fleet Service and Ground Service employees with increased compensation and enhancements to other contract items such as vacation, sick time and holidays.
The tentative agreement also gives American additional productivity and better aligns our work rules with all other airlines through outsourcing the dayline cabin cleaning and fueling work. The employees currently performing these jobs will be reassigned to other duties. The productivity improvements and savings provided through the outsourcing helps fund the structural increases and the other economic enhancements, while ensuring that we remain competitive.
The parties worked collaboratively throughout the negotiations process. This is the second tentative agreement reached for this workgroup. After the first TA was not put out for a vote, the parties worked within the structure of the first agreement and continued to identify creative solutions to address the key interests of both our TWU-represented employees and the company.
This agreement is a significant step in our efforts to achieve the competitive costs that are critical to our future success.
American Airlines has more than 50,000 employees represented by unions, including approximately 10,350 under this tentative agreement.
Key highlights of the agreement are below.
Compensation
Signing bonus of 6% lump sum on date of signing.
3% structural increase effective date of signing.
2% structural increase effective 12 months after date of signing.
2% structural increase effective 24 months after date of signing.
2% structural increase effective 36 months after date of signing.
Increase Crew Chief override premium from $1.50 to $1.75 per hour.
Profit Sharing
Replace the current financial component of the AIP plan with an uncapped annual profit sharing plan that rewards employees at the first dollar of pre-tax earnings, excluding special, unusual and non-recurring items.
This matches the richest plan in the industry.
Scope
Outsource fueling (includes Title III and IV) at the following stations: BNA, BOS, DTW, ELP, LAX, LGA, ORD, PHX, SAN, SFO, TULE. Title IV employees will be assigned to Title III work.
Outsource dayline cabin cleaning at the following stations: BOS, DFW, JFK, LAX, LGA, MIA, ORD and SFO. American commits to not furlough at these stations until 1,276 Fleet Service employees have separated from the company.
Outsource bus drivers at LAX and ORD.
Holidays
Increase the total number of holidays from 5 to 10 days in 2012 by adding the following:
Good Friday
Martin Luther King, Jr. Day
Memorial Day
Columbus Day
Day after Thanksgiving
Increase holiday work rate of pay from 1.5x to 2.0x on date of signing.
Vacation
Double the vacation time for employees with less than 5 years of service from a minimum of 5 days vacation to a minimum of 10 days vacation.
Sick Leave
Increase the sick leave accrual rate from 5 to 8 days per year, effective January 1, 2012.
Retirement Benefits
Provide a defined contribution 401(k) plan for new hires, better aligning American with what is standard in the industry.
After one year of eligible service, new hires will receive an automatic 2.5% company contribution to the $uper $aver Plus 401(k) plan, based on qualified pensionable earnings with no employee contribution required.
After one year of eligible service, the company will also give a 100% match for employee contributions up to a maximum of 3%, for a total maximum company contribution of 5.5%.
Current employees will have a one-time option to change from the defined benefit pension plan to the $uper $aver Plus 401(k) plan. Current employees' pension credited service and pay growth would be frozen.
Active Medical
Replace the current $150 Contractual Standard medical option with the Value medical option, which is currently offered today and is the same as what is offered to managers and the Agents, Reps and Planners. This change would not go into effect until 2013, as open enrollment for 2012 has already closed. Contribution rates for the Value medical option will remain at the 2012 rates for three years (2013-2015). In 2016, American will evaluate the current contributions versus inflation to determine if any adjustments are needed.
The Value Plus option will remain a voluntary medical option.
$150 Contractual Standard Medical Option (Current)
Value Medical Option (Proposed)*
Employee Only
Standard Option 1: $90.75
$59.42
Employee + 1 Dependent
Standard Option 1: 181.21
$118.84
Employee + 2 or more Dependents
Standard Option 1: $238.62
$178.27
* Costs for the Value Medical Option vary because there are three network/claims administrators used, depending on the state you live in.
Retiree Medical
The tentative agreement guarantees access to retiree medical coverage, regardless of employee health status - both before and after age 65 - but modifies the funding of those programs to better align American with the industry and corporate America.
Current Retirees: No changes to plans for current retirees.
Current Employees: Prefunding will end and prefunding balances will be refunded. The average refund is $5,000.
Employees Retiring Within Three Months of Ratification: Retain current retiree medical benefits.
Employees Retiring After Three Months of Ratification, Pre-65 Coverage: Retirees will pay a monthly premium for coverage in the Standard retiree medical option, paying the same per person monthly rate as active employees pay for coverage in the Value medical option for Employee Only Coverage.
The Retiree Medical plan coverage will be the same plan design as offered to the TWU retirees today except in-network benefits will be paid at 80% by the company after the deductible and out-of-network benefits will be paid at 60% by the company after the deductible.
Current Employees Retiring After Three Months of Ratification, Over-65 Coverage: The company will provide access to guaranteed issue Medicare supplement plans.
New Hires, Pre-65 and Post-65 Coverage: The company will provide access to guaranteed issue coverage and the new hire will pay the full contribution.
Eagle ASM Cap
The current Eagle ASM Letter restricts American’s ability to compete with other legacy carriers and their regional partners because it limits the number of American Eagle/American Connection available seat miles (ASMs) those carriers can fly relative to the American Airlines ASMs across the network.
The tentative agreement gives us the flexibility to modify the cap from 6% to 12% with the current counting methodology.
Upon modification or elimination of this letter in each of the other 6 AA/TWU labor agreements, Article 42: Job Security will be amended to provide a new system job protection date of 6/26/2000 for Title III employees. This affects approximately 1,000 employees.
Duration of Agreement
Establish the duration of agreement as 48 months from the date of signing, with an option for either party to open the agreement six months prior to the amendable date.
