NEGOTIATIONS UPDATE

The Joint Negotiating Committee and the Company will meet in session next week in PHX. I would like to take this opportunity to update you on where we are and where we are going.

We have been in negotiations for over a year. Although it may seem we are not getting anywhere, there has in fact been a great deal of work done. This process is laborious for several reasons. In many ways the underlying principles and language of the US Airways and America West contracts are vastly different.

The Company wants to negotiate a contract that keeps their costs as low as possible and we won't accept anything less than a contract that meets the needs of our members. In simplistic terms, the overriding principle is we want the best of both contracts and the Company wants the worst of both contracts. In reality it is more complicated than that.

Through two bankruptcies and three contract concessions the US Airways Flight Attendants suffered tremendous losses in wages, benefits and work rules. In order to survive we have all sacrificed and now that the Company is profitable, and the industry appears headed for recovery, we want those sacrifices acknowledged. We want the acknowledgement to be in contractual form rather than a pat on the back.

The America West Flight Attendants have been working under a contract that was ratified in 1999 and became amendable in 2004. The America West Flight Attendants were in the process of renegotiating their contract when the merger was announced. That process was halted by a federal mediator and the America West Flight Attendants were forced to set aside their contract negotiations to negotiate a single agreement.

We lost in order to survive and they have been working under a substandard agreement and forced out of negotiations to improve that agreement.

No matter the reason, both work forces are entitled to and expect improvements.

As I have written before, an illustration of the different contracts can be drawn by looking at compensation and vacation. Our pay rates, at all pay steps, are higher than America West. The America West vacation is better than ours. While it is fair to say that we should all be paid the same, we do not agree that simply bringing America West Flight Attendants up to our pay rates is appropriate- we expect pay rate increases as well. By the same token we will not agree to a vacation proposal that returns vacation days and pay to us at the expense of some other contract section.

So where are we?

Contract negotiations are conducted under a formula that typically starts with the more non-economic (money) sections first and then leads into the economic sections. While everything has a cost to it, the more obvious economic sections would include scheduling, vacation, sick, reserve and compensation.

To date we have worked on 15 of the 32 East contract sections with the following breakdown:

We have reached Tentative Agreements on the following sections:

• Period of Probation
• Filling of Vacancies
• Medical Examinations
• Dues Check -OFF/Union Security
• EAP
• Voluntary Contributions (Flight PAC- Pegasus)

We have made improvements in all of these sections and I have outlined those improvements in previous Elines.

In this negotiation the Union is writing the initial proposal and passing that proposal to the company for their counter proposal. The process goes back and forth with both sides adjusting language to reach agreement on the various provisions of each proposal. At a certain point it becomes obvious that one side or the other is unwilling to move off of their respective position and no amount of "proposal passing" is going to change that position at that point in time. When that happens a decision is made to "table" the section and move on. The tabled section will then be revisited at a latter time and hopefully a section Tentative Agreement can be reached.

An example of a tabled section and the reason why it was tabled is Training. The Company is insistent on a quarterly Computer Based Training (CBT) module in place of our Recurrent Home Study booklet. We have a proposal that would improve pay for training, set a limit on the hours a Flight Attendant can be away from domicile without being provided hotel accommodations and pay for the travel day and rest before during and after training that have been conceptually agreed to by the Company. However, the Company's proposal still contains their CBT language. The JNC is unwilling to agree to CBT and the Company is currently unwilling to move off their position therefore the section has been tabled.

We currently have the following sections listed as tabled:

• Moving Expenses
• LODO
• Reduction in Personnel
• Training
• Grievance
• System Board
• Safety and Health

Although the tabled sections all contain improvements to existing language, for one reason or another, each side is unwilling to bend in certain areas in order to reach a Tentative Agreement to the tabled sections. In some cases the gap is wide and in others narrow. For example, the LODO section contains some significant improvements to our current LODO program but has been tabled over a dispute involving tuition reimbursement. The Company has proposed that in order to be reimbursed up to the agreed to $1000 limit the Flight Attendant must pass the course, pass the LODO test and be awarded a position in the LODO program. The Union's proposal requires only that the course be passed. We see no reason for the Flight Attendant to have to wait for reimbursement until their seniority can hold a LODO position. This is a relatively narrow gap compared the wider gap in the Training Section.

Another example would be in Safety and Health. We have made some big improvements in this Section with the most notable being an agreement that following a Serious Incident the Flight Attendant(s) will be immediately removed for the remainder of the trip and pay protected. A Serious Incident is defined as:

1. Serious injury to a Flight Attendant, or any incident where medical personnel are called to an aircraft to assess a Flight Attendant;
2. Actual evacuation or cabin preparation for an evacuation;
3. Fire and smoke on board resulting in injury
4. Physical assault of a Flight Attendant by a passenger(s);
5. Aircraft decompression;
6. Turbulence resulting in injuries to crew members or passengers;
7. Bomb threats;
8. Any specific terrorist threat assessment issued and permitted to be released by any government agency.

Our proposal also contains a provision that would pay protect a Flight Attendant for an additional two duty periods if the Flight Attendant had a trip that backed up to the trip on which a Serious Incident occurred. The company has not agreed to that provision.

In addition to the tabled and tentatively agreed sections the following sections are currently being actively worked on and are considered "open":

• Uniforms
• Leaves of Absence
• TDY
• General
• CRAF

The TDY section includes a proposal that would permit the use of out of base OPR assignments under the terms of a single trip TDY assignment. This would make the assignment a full pairing and not a split pairing requiring adequate compensation based on duty rigs, trip rigs or variable minimum.

The General section contains important language regarding jumpseat and cabin cleaning/tidying. Both contracts contain significant differences in those two areas. The America West jumpseat is not exclusive to Flight Attendants and the America West Flight Attendants clean/tidy after all flights. We have proposed language that protects our jumpseat exclusivity and would further reduce the number of flight East Flight Attendants have to clean/tidy.

In addition to the above sections the JNC will have two additional proposals, Deadhead and Charters, ready to pass to the company next week. We all know that deadhead at 50% pay/no credit will not be in our proposal.

So, that is where we are. As you can see we have a long way to go. We have the major sections coming up and we know where the problems are. We know the Reserve system needs to change. We know we need improvements in Sick, Scheduling and Vacation.

The committee has decided to conduct a member survey/poll regarding the upcoming sections. There are significant differences in the upcoming sections between the two contracts. In light of those differences, there will have to be great deal of internal discussions within the JNC as to how we proceed. The poll will be conducted for both East and West. Information from the poll will be used in conjunction with our internal debate to formulate our proposals.

The committee will do whatever we have to do in order to bring out a full Tentative Agreement that addresses the concerns of the members. The road ahead may be bumpy but we will drive it anyway and not be deterred in our efforts.

I know there are plenty of rumors out on the line. I caution everyone not to give credence to anything that begins with, "I heard..." If you don't see it in an Eline- it has not happened.
 
Thank you,