• Notes from the US Airways Negotiating Committee Decide your future for yourself - VOTE!
• Voting Instructions 
• Flight Attendants benefit from Pilots' tentative agreement 
• Q & A - Most often asked questions & answers from the Roadshow

If we have learned anything from our American election system, it is that people who are disenfranchised with politics tend not to vote, while those who are mad and want to make a statement, vote. 

It's impossible not to feel disenfranchised to a certain degree from this airline based upon past management decisions and knowing that our carrier is now teetering on the brink of bankruptcy. But it is exactly because of the bankruptcy option that you need to make your voice heard and vote. 

The tentative agreement provides for certain protections in bankruptcy that we will not get if the deal fails. It also provides for a chance at flight attendants seeing some returns on our investment in this airline if/when the airline turns around in the future. The only way to make sure those protections and returns are there for us is to vote. 

We know the decision before you is essentially picking the lesser of two evils. But it is still vital that you cast your ballot. 

Since flight attendants spend so much of their time on the road, we have installed a new voting procedure for this contract ratification. It's an electronic balloting system that allows you to vote by phone or via the internet. 

The system is secure and your vote will remain confidential, just like under mail ballot procedures. The electronic voting system is also significantly less expensive than the mail ballot system. AFA has used this electronic voting system with significant success for internal votes, and the pilots' union has used the exact same electronic voting system for all of their votes for the past two years.

This ratification vote is being conducted by electronic ballot. You may vote either by telephone or the internet. In order for your vote to count, you must carefully follow these instructions: 

To use the system, you must enter an ID number and a PIN. The ID number is your US Airways employee ID number. If your US Airways employee ID number is NOT a 5-digit number, you must add the appropriate number of 0's in front of the number to equal a 5-digit number.

Example: 
ID Number: 
12  = 00012 
123  = 00123 
1234 =  01234 
12345 =  12345 

Your PIN is the last four digits of your Social Security Number. Once you have logged in, you will be prompted to change your PIN. Be sure to REMEMBER YOUR NEW PIN as you will need it if you wish to access the ballot again. 

To vote via the INTERNET, log onto:  https://www.ballotpoint.com/afa. 

Note: you must include the 's' in 'https' otherwise you will not be able to log onto the site. The 's' indicates it is a secured site. 

Once at the site, enter your ID number and PIN, click, 'Login.' 

Next change your PIN as instructed. From the menu on the left side of the screen, select, 'View Ballots.'

Then, simply follow the instructions on the page and select the appropriate ballot from the menu (US Airways Ratification Ballot) and click, 'Request Ballot.' 

Mark your vote by clicking on the bullet adjacent to your selection; when completed, click, 'Cast Ballot.'

You will be given a confirmation number; be sure to write this down, then click, 'Logout.' Your vote has been cast. 

To vote via TELEPHONE, access the system by dialing 1-877-AFA-VOTE (1-877-232-8683). 

First, you will be prompted for your ID number and PIN. Use the touch tone keypad on your telephone to enter your responses. The system will guide you through the process of changing your PIN, selecting the ballot, and casting the ballot. Once completed, the system will give you a confirmation number, be sure to write this down. 

Once you have voted, you may change your vote if you choose through either method. You must remember your new PIN to access the system. Only the last ballot cast will be counted. If you experience any problems with the voting system, call AFA Membership Services at 800-424-2401 x 860 during normal business hours.

The polls for voting opened at 12:01 AM Eastern Daylight Time on July 28, 2002. The polls will CLOSE at 5:00 PM Eastern Daylight Time on August 9, 2002. 

The ballots will be tallied after the close of polling on Friday, August 9.

Flight Attendants benefit from Pilots' tentative agreement 

Because your Negotiating Committee insisted that any improvements that the pilots' negotiate must also apply to flight attendants, the following improvements have been added to our tentative deal: 

• Furloughed Flight Attendants will receive pass privileges for themselves and their immediate families for the duration of their furlough. Thus, the tentative agreement provision that furloughed flight attendants will receive passes for 24 months will be modified to reflect the increased benefit. 

• We have an agreement with management that we will have a "me-too" with the ALPA MidAtlantic Sideletter, including full longevity credit for pay and benefit purposes for any furloughed mainline flight attendant that takes a position with MidAtlantic. The agreement also calls for a new AFA contract to be negotiated when MidAtlantic starts-up, which will cover all MidAtlantic flight attendants. 

• The pilots received certain improvements in their 401k plan. While not all of these apply to the flight attendants because of differences in our 401k plans, those aspects that do apply to flight attendants will be given to us. You can find the ALPA language on p. 51 of their tentative agreement: www.usairwayspilots.org.

• Every Jan. 1 after the agreement becomes amendable (beginning Jan. 1, 2009), the flight attendants will receive a 3% wage increase until an agreement on a new contract is reached. This improvement was agreed to in time to include it in the tentative agreement summary book you received in the mail.

Q: Are we in a better position if we reject the tentative agreement and in bankruptcy let US Airways ask the bankruptcy court judge for the concessions it needs by filing an 1113 application to reject our collective bargaining agreement? 

A: No. Unlike most courts, the bankruptcy court is tasked with a very specific objective when a company files for protection under Chapter 11 of the Bankruptcy Code. The purpose of Chapter 11 is to permit a bankrupt company to reorganize and emerge from bankruptcy as a viable entity. The bankruptcy court judge is very interested in seeing that this objective is achieved. Therefore, it is usually the case that if a judge perceives a party as an impediment to the debtor's ability to reorganize, he or she will not look upon that party favorably. Obviously, labor, as much as any other constituency, can cause significant problems for a debtor. This is particularly true when a debtor has sought and the union has opposed negotiating necessary concessions. This will result in the debtor seeking 1113 relief and labeling the union as an adversary and opponent to the debtor's reorganization. 

The situation here is especially bleak since US Airways has told us that if forced into bankruptcy without an agreement with AFA, it will seek deeper concessions than those contained in the tentative agreement. It will argue that the costs of bankruptcy combined with the loss of revenue caused by a bankruptcy filing justify these more severe cuts. In these circumstances, it would be unwise to let a bankruptcy court judge rather than ourselves decide our future. 

Q: Is it possible that even if we ratified this tentative agreement and US Airways files for bankruptcy, the bankruptcy court judge on his or her own could decide that deeper cuts should be made to the flight attendants' labor agreement? 

A: It is highly unlikely that a bankruptcy court judge would disturb an agreement reached between the debtor (in this case US Airways) and a union. In fact, Section 1113, the provision in the Bankruptcy Code that describes how a debtor can reject a collective bargaining agreement, identifies only the "debtor" as the party that can seek to reject a labor contract. 

Equally important, and as a practical matter, a bankruptcy court judge is not in the habit of second guessing a debtor's decision when made in the regular course of its business. This is particularly true with a collective bargaining agreement which is complex and a product of extensive negotiations. US Airways has determined that the concessions contained in this tentative agreement, if ratified, are the only concessions needed to successfully reorganize. Rather than scrutinize the specific contractual provisions to which the parties have agreed, the bankruptcy court judge is far more likely to accept and be satisfied that a settlement has been reached between the debtor and labor. 

Q: Why is the bankruptcy protection letter (1113 Letter) only good through December 31, 2002? 

A: US Airways is so low on cash that, without the loan guarantee from the ATSB, it will be forced to file for bankruptcy well before the end of this year. If the carrier files for bankruptcy this year, the 1113 protection is activated. Once activated, the 1113 protection stays in effect until the carrier comes out of bankruptcy - even if the carrier comes out of bankruptcy in 2003 or later. 

If (or when) the carrier gets the loan guarantee, it will have plenty of cash to complete the restructuring and move forward with its plan to become profitable.

That said, management could fail to turn this carrier around and have to file for bankruptcy a year or two from now. In that case, negotiating concessions wouldn't likely be the order of the day. We believe US Airways would be filing for bankruptcy not to reorganize, but to liquidate. The only negotiations that would happen in that case are negotiations with the carriers or investors who purchase the pieces of US Airways. 

In the 1113 letter, management says that if we ratify the tentative, it will not ask for any more cuts from us than those contained in the agreement. Management goes on to say that the concessions are sufficient to allow a full restructuring. The 1113 letter in our tentative agreement is the same letter the pilots have. It is the best protection available against further cuts to our contract if the carrier files for bankruptcy as a result of the crisis at hand. Could this airline fail and file for bankruptcy in the future? Yes. And at that point, it's likely the end of US Airways, so an 1113 letter would not protect us in that case -- the only hope of protection against that scenario is to work with management to get the ATSB loan and fix the carrier now for the long-term. 

Q: If the airline becomes profitable, and our tentative is ratified, when will we see our first profit-sharing check? 

A: Flight attendants will receive their first profit-sharing check at the end of the first year the airline realizes a profit, and will receive future profit-sharing checks in every year that the airline shows a profit through the term of the agreement. 

Under the airline's Restructuring Plan, once the labor concessions are finalized and the ATSB loan guarantee is in place, the airline predicts it will realize a profit in 2003 (albeit a small profit that year). Similar to the Southwest profit-sharing plan, at the end of each calendar year, 15% of pre-tax profits (extraordinary expenses will not be counted against profits) will be set aside for the employees. Since the flight attendants represent 9% of the concessions, 9% of the 15% of pre-tax profits will be given to the flight attendants as cash. The AFA US Airways MEC will decide on the final distribution procedures for the profit-sharing plan. 

Q: How will the -Equity- returns work? 

A: In many cases, a company's stock can rise even faster than profits. To ensure that the flight attendants were rewarded for a sustained rise in the airline's stock (and not penalized if the stock falls), AFA and management have agreed to a plan that will provide additional cash compensation to flight attendants if the airline's stock price rises above expected levels and stays high. 

The way it will work is that at multiple periods through the term of the agreement, the parties will look at the airline's stock price. If US Airways' stock price is higher than projected levels, payments under this plan will be made in cash to flight attendants. However, if the stock price is lower, flight attendants will not feel the negative effects of holding stock in the airline that is now worth less than we paid for it.

Q: Will flight attendants continue to move up the pay scale for years of service on their anniversary date?

A: Yes. Each year on your anniversary, you will continue to receive your step increase. For example, a 5th year flight attendant reaches her 6th year anniversary in December 2002. If this agreement is ratified, under the new pay scale, she will jump from the new 5th year hourly rate of $26.74, to the new 6th year hourly rate of $32.22. When she then goes into her 7th year in 2003, she will jump to the 7th year hourly rate of $33.96. And as the hourly rate increases take effect in years 2004-2008, flight attendants will receive not only their step increase, but also will get the new, higher hourly rates. 

Q: Are the contribution rates under the new health care plan monthly or per paycheck? 

A: The employee contribution rates that are in the tentative agreement are monthly premiums, not per paycheck.

Q: Since everyone in the company is going to be put under the new Preferred Provider Organization, why are the flight attendant contribution rates so much lower than the pilots? 

A: While the pilots (and everyone else at the airline) will be put under the same PPO health care plan, the pilots told the company they were willing to pay more per month for their health insurance. In essence, the pilot Negotiating Committee wanted more of the concessions they gave to management to be in the form of health care cost increases. 

In fact, management's first proposal on the health care change left the employee contribution levels open for all future years so it could pass on even more costs to the workers. Flight attendants can't afford to pay the excessively high premiums that the pilots agreed to. When your Negotiating Committee knew the pilots were prepared to pay higher premiums, they told the company that there was absolutely no way flight attendants would agree to such high premiums. Management didn't like changing the employee contribution levels, but ultimately agreed to much lower employee contributions for flight attendants because of the hard line the Negotiating Committee drew at the table. 

Q: Is our 2002 vacation affected by the vacation accrual reductions in the tentative agreement? 

A: No. If the tentative agreement ratifies, vacation that you take in 2002 will not be affected. However, your vacation for 2003-2008 will be reduced by 10%.

Q: How is the fact that pilots' have recently received substantial wage increases reflected in the amount of cuts they are taking? 

A: Management adjusted the levels of concessions in recognition of the parity raises pilots have recently received. Here's how: while the pilots make up 39% of company payroll, the pilots are making 55.4% of the total concessions. That means the pilots are making significantly higher concessions in proportion to their overall cost to the company. Flight attendants, however, represent 14.1% of payroll, yet will total only 9% of cuts - meaning we are taking cuts that are proportionately less than our total payroll position in the company.

This fact is not intended to diminish the cuts we are taking. It does, however show that as a matter of fact, flight attendant cuts represent a lower percentage of the total cuts than one would expect if the cuts were based upon total payroll costs. 

Q: Since the company has agreed to continue to explore an -Early Out- retirement package, when can we expect that to take effect and what will the package have in it? 

A: As soon as the agreement is ratified, management has committed that it will sit back down with flight attendant representatives with the goal of developing an -Early Out- retirement package. That package is intended to do two things. First, it will be designed to give flight attendants that are close to retirement an incentive to retire now. Secondly, if the package does in fact entice senior flight attendants to retire, more mainline jobs will be available for less senior flight attendants. 

The entire reason the concession negotiations happened in the first place is because the airline has too little cash to continue operating at its current levels. So, everything in the concessionary agreement is designed to provide management with cash to run the airline. Your Negotiating Committee worked closely with our pension advisors to develop an -Early Out- that is cost neutral or cost savings in the first few years of the plan. But we weren't able to. If this agreement is ratified, we will sit back down with management to work on a plan that is either cash savings or cash neutral in the early years, and which saves the airline money in the long run (by replacing a more senior flight attendant with a more junior one). 

Q: If changes to our scheduling or reserve systems are negotiated in the talks that are slated to take place after this tentative agreement is ratified, will the flight attendants get a chance to vote on those new items? 

A: It is the recommendation of the MEC President, Karen Lascoli, and her recommendation has been supported by the Local Presidents at each location this question was asked, that any agreements made with the airline as a result of the productivity talks would be put to a vote of the members. 

The Negotiating Committee also has it in writing from the company that if the pilots make any productivity changes, including changes to their scheduling procedures, those changes will not affect the flight attendants if the flight attendants choose not to participate in those changes, regardless of any 'Me Too' agreements.

Send your questions and keep up to date with: http://www.afausairways.org/eforms/restructure.html

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Negotiations Infoline - 800-531-3242 
or Hotline - 800-654-3143 
 
 

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