Contents:

• MEC Special Meeting Continued 
• Notes from Negotiating Committee
• U.S. Senate Votes To Preserve Air Loan Guarantees
• Crew Accommodations Committee Report

The MEC will continue its Special Meeting of last week to meet with the Negotiating Committee. 

The Agenda: 

• Complete briefing from the Negotiating Committee.
• MEC review of information received from the Negotiating Committee. 
• MEC to direct the Negotiating Committee, as necessary, on how to proceed in further talks. 

Place: 
       AFL-CIO Headquarters 
       George Meany Room 
       815 16th Street, NW 
       Washington, DC. 

Note that the MEC reserves the right to close their meetings to discuss confidential matters. The meeting was closed last Friday.  Whether this Friday's meeting will remained closed is not known. 
 

The Negotiating Committee, despite their heavy work load and the constraints of a short timeline, will do their best to note their daily progress for us, if any, and their meeting schedule with the Company, once set. 

For June 4, 2002:

1. Discussion with Phil Comstock. 

2. Reviewed results from company's "cost out" of productivity savings. Concern with numbers 'too low'; review by
Mark King, analyst from Eclat. 

3. Communication with membership on our current status (letter from MEC President, Negotiating Committee &
Bankruptcy Q&A's) to be mailed to all flight attendants.

4. Received ALPA's proposal of 6/3 (www.usairwayspilots.org).

5. Met with Company: 5:00pm - 8:30pm. 

6. Asked Company for more "cost outs" of other items.

For June 5, 2002:

1. In session starting at 10:00am. Buddy Brannon now serving as Committee Chair. 

2. Continue review of Company's numbers on pension, our participation plan. Mark King, analyst with Eclat, has different numbers. Claude, pension specialist, has different pension numbers than Company. Most numbers are being skewed to the company's favor. We are looking into it. 

3. Second presentation from Tower Perrin, independant consultants, on benefit illustrations for proposed P.P.O. plan. 

4. Caucused with other labor groups after meeting, concern that there was no cap on potential increases in the future and would be more costly to those who just took a pay reduction. ALPA was absent from meeting perhaps because their proposal to the company does not include any changes in benefit. 

5. The Seagal Group (our health and benefits people attended meeting) were concerned about potential for a lot of disruption to members for very little gain.

6. Met with company from 4-8:30pm. They gave us their proposal for reduction of f/a group, they're also planning to give a proposal to all other groups. 

7. Continued to prepare for Friday meeting with MEC for direction. 

8. Tomorrow, June 6, 2002, Labor Coalition meets at 11:00am at AFL-CIO Headquarters. 

The Negotiating Committee.

WASHINGTON, June 4 (Reuters) - The U.S. Senate voted on Tuesday to preserve $10 billion in loan guarantees for struggling airlines, giving cash-poor US Airways and other proponents of the program new leverage on Capitol Hill.

The 91-4 vote to remove language from a homeland security spending bill that would have significantly restricted the program, brightened prospects for US Air.

The Arlington, Virginia-based carrier plans to seek $1 billion in guarantees and mounted a heavy lobbying campaign to preserve the program established by Congress as part of a larger bailout to help airlines hurt financially by the Sept. 11 attacks.

Looking for ways to pay for homeland security priorities and stay within White House spending guidelines, some in Congress sought to rescind or at least scale back the little-sought loan guarantee plan to save between $300 million and $1.3 billion.

As part of its $30 billion version of the homeland security bill approved less than two weeks ago, the House of Representatives cleared a plan to defer airline loan guarantee payouts until Oct. 1, the start of the new fiscal year.

And a proposal approved at the same time by the Senate Appropriations Committee would have left little money for guarantees in 2002 and reduced the total cost of the program from $10 billion to $4 billion in 2003.

US Airways said the restrictions would have a devastating impact on its efforts to restructure its finances. The No. 6 U.S. carrier lost $2.1 billion last year and another $269 million in the first quarter of 2002.

Under the federal guarantee program, airlines secure backing from the government for private financing.

MOUNTING POLITICAL PRESSURE

With political pressure mounting, the Senate decided to back off and help US Airways.

An amendment offered by Sen. Robert Byrd, a West Virginia Democrat and appropriations committee chairman, and the panel's ranking Republican, Ted Stevens of Alaska, removed the loan guarantee restrictions from the Senate homeland security bill.

Although the fate of loan guarantees must still be decided during House and Senate negotiations on their two versions of the legislation, the Senate shift signaled that powerful lawmakers had coalesced behind the airline industry.

"We need to send a strong signal to the other body when we go to conference that we cannot destroy the aviation loan program," said Sen. John McCain, an Arizona Republican.

A government board set up to oversee that initiative has approved only one application so far. That was from America West Holdings for $380 million.

In the past week, the board has rejected applications from Vanguard Airlines Inc. and Frontier Flying Service Inc., a small commuter carrier based in Alaska. The government was not confident either carrier could pay back the loans.

United Airlines is considering a loan guarantee application. The application deadline is June 28.
 
 

The Ramada Valley Ho closed its doors; therefore, a replacement property needed to be selected. On Friday AFA, ALPA, and the Company returned from a site inspection conducted in PHX. 

Several acceptable properties were found. AFA and ALPA submitted their recommendations to the Company on Monday. It was determined that AFA and ALPA recommended the same property. 

A decision by the Company is to be made by June 15. As soon as the Committee receives notice of the final determination, it will be provided to you via the E-line. The Committee thanks all of you who took the time to provide feedback. 

Your opinions and suggestions are always welcome and appreciated. The Crew Accommodations Committee addresses every concern they receive. Replies are gladly provided upon request. 

Please continue to complete an OF310 either by using the ONLINE OF-310 or by filling out the paper form and  putting it in my mailbox (Audrey Federoff-Lindner, PIT based F/A) for any problems you may encounter.  The form can also be sent by Company mail.  The Company needs to hear from you regarding your dissatisfaction with any property.  Don't worry about filling in specific dates. These forms are also used for general information. 

If you have any suggestions on properties, please feel free to contact me at alindner@afausairways.org or 724-942-3039.

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