Dear Members,
During recent discussions with the company regarding the VFLR and Medical COBRA, the MEC asked if the company would consider permitting the VFLR
Flight Attendants to change their "Coverage Option" in order to afford COBRA for 18 months. Many of the
Flight Attendants are on Option 3, and the COBRA coverage in that Option is very expensive. To make it more affordable for the VFLR participants, the MEC went into discussions with the company to allow the awardee to choose to change their "Option". The company has agreed that this type of "leave" could be considered a life-changing event, and therefore has agreed to allow the awardee of the VFLR to change their option coverage by notifying COBRA
Serv. This information on how to change your "option" is in the VFLR packet for the June release. Also, the cost of COBRA for Options
1, 2 or 3 are in your packet and on the MEC website (http://www.afausairways.org/Restructure/Ret_Med.pdf).
The company is in the process of sending out a CBS message to remind the VFLR participants who have a June release that they can change their "Option" and how to go about doing this. Once the company sends out the CBS, we will send out the info via E-line.
Please stay tuned.
Teddy
MEC President
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SCHEDULING COMMITTEE
Position to be filled at the MEC Meeting on June 14, 2005. Term of office is
June 14, 2005 - December 31, 2007. To request an application please call,
877-330-0449 or send a resume to: DMccormick@afausairways.org.
An online application is available HERE.
Interested candidates in attendance may participate in a brief interview by
the MEC (NOT required). Read
More Here - http://www.afausairways.org/mec/positions/sched05.htm.
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US Air-America West Talks Intensify
Airbus Loan of $250 Million Moves Merger Still Closer, But Future Challenges Await
By SUSAN CAREY and MELANIE TROTTMAN
Staff Reporters of THE WALL STREET JOURNAL
May 19, 2005; Page A3
US Airways Group Inc. and America West Holdings Corp. worked yesterday to finalize a merger agreement that could be announced as early as today, after nailing down a crucial $250 million loan from aircraft maker Airbus and nearing equity and financing agreements with other key players, people familiar with the matter said.
But even if a deal is completed, creating the nation's No. 6 airline in terms of traffic and ultimately bringing US Airways out of bankruptcy-court protection, industry observers warn that the new carrier still faces significant obstacles from labor unions, tough industry conditions and competition from budget carriers such as Southwest Airlines.
![[Flying Together?]](http://www.afausairways.org/FA/may19.jpg) The board of US Airways met yesterday, and America West's board is scheduled to meet today, and the airlines were preparing for an announcement late today, according to the people familiar with the matter. Last-minute obstacles could arise to further delay the deal, but these people said they were hopeful an agreement could be finalized shortly.
Agreement details still needed to be hammered out with General Electric Co., the largest creditor of both airlines, and with ACE Aviation Holdings Inc., parent of Air Canada. Air Canada declined to comment, and GE said it's still in talks.
The two airlines are expected to raise a total of about $500 million in new equity from Air Canada, regional carrier Air Wisconsin Airlines, two hedge funds and a rights offering, according to people familiar with the expected deal. Another $250 million would be provided in the loan from Airbus. Other fund raising, including potential sales-leasebacks of some planes, is expected to bring up the total new capital to more than $1 billion when the deal closes. The airlines are also discussing restructuring their $1 billion in loans guaranteed by the federal Air Transportation Stabilization Board and set up to provide liquidity after the Sept. 11 attacks.
But even if the two companies ultimately receive the requisite approvals from their creditors, America West shareholders, the federal government and the bankruptcy judge overseeing US Airways' reorganization, "the obstacles are huge," said Michael Roach, the founding president of America West and now a consultant for Roach & Sbarra Airline Consulting in San Francisco.
Labor is one top concern. Unions have to agree to combine their seniority lists, normally a contentious exercise, because employees with less seniority often lose out. The Air Line Pilots Association branch at US Airways is scheduled to hold a special meeting today and tomorrow to consider hiring merger counsel and investment bankers, and staffing up its merger committee. Officials at the ALPA branch at America West have already vowed to protect their members, saying in a phone message to members that these times "will either bring us together or tear us apart."
On top of that, US Airways brings to the deal much higher costs than America West, though the former has cut its expenses significantly in two bankruptcy reorganizations. The combined carrier also will face competition at three hubs from Southwest. "Southwest may see this as an opportunity to test them," Mr. Roach said.
A merger is intended to allow US Airways to fly out of its second Chapter 11 since 2002 and give America West some needed liquidity and ability to grow into a truly national airline. The marriage would combine US Airways' big East Coast presence, flights to Europe and the Caribbean, and membership in the global Star Alliance marketing team with America West's West Coast route network and lower costs. Doug Parker, America West's chief executive and a 10-year veteran there, is expected to run the company, which would be based in Tempe, Ariz., his company's current headquarters, and fly under the US Airways brand.
The combination could spark consolidation in an industry struggling with too many seats and too many players at a time when fuel is costly. US Airways has been trying to find a buyer for two years. But few investors have shown interest in putting money into US Airways as a stand-alone airline, given that it is now under assault by Southwest in Philadelphia and Pittsburgh, and other low-cost carriers in Charlotte, N.C., Washington and Boston.
Meanwhile, America West, which is facing a liquidity squeeze later this year, is hemmed in by Southwest in Phoenix and Las Vegas, and may be too small to have a long-term future as a stand-alone carrier.
Some wonder if Mr. Parker, whose airline has brighter short-term prospects and actually posted a first-quarter profit, is making a mistake. Jim
Corridore, an equity analyst at Standard & Poor's Corp., says the America West chief "is tripling up on his risk exposure." And if for some reason the deal doesn't come off, America West would be in play and ostensibly could be gobbled up by another discounter with a strong balance sheet, a cash-rich regional airline or hedge-fund investors.
America West's market capitalization stood at $157 million yesterday. Its shares have fallen since the merger discussions were disclosed in April and now trade just above their 52-week low. America West rose eight cents to $4.43 in 4 p.m. New York Stock Exchange composite trading.
Write to Susan Carey at susan.carey@wsj.com and Melanie Trottman at
melanie.trottman@wsj.com
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Spending account deadline: March 15
By Sandra Block, USA TODAY
A Treasury Department ruling issued Wednesday will give workers with flexible spending accounts more time to spend their money before it disappears.
Health care flexible spending accounts allow workers to have pretax money deducted from their paychecks for out-of-pocket medical costs. Dependent care accounts allow workers to use pretax money to pay for child care.
But a use-it-or-lose-it provision forces participants to forfeit funds that aren't used by the end of the year to their employer.
The new ruling from the Treasury Department says employers with flexible spending accounts can give workers an extra 2½ months to spend the money.
"Rather than spending the money before New Year's Day, you'll have until March 15," says Joe Martingale, a health care strategy expert for consulting firm Watson Wyatt.
The extension will "ease the year-end spending rush prompted by the prior rule," Treasury Secretary John Snow said in a statement.
Flexible spending account supporters say the use-it-or-lose-it rule discourages many workers from using the accounts.
While about 22 million workers have access to the accounts, only about 7 million sign up, according to the Employers Council on Flexible Compensation. Workers who participate tend to put aside relatively small amounts.
In addition, the rule encourages participants to spend money on products and services they don't need, Martingale says.
A bill that would have allowed workers to carry over up to $500 in unused funds passed the House last year but failed to win Senate approval.
Last year, Iowa Republican Chuck Grassley, chairman of the Senate Finance Committee, asked Treasury to use its administrative powers to scrap the use-it-or-lose-it provision. Snow said Treasury doesn't have that authority.
In light of that debate, Wednesday's announcement "comes as kind of a surprise," Martingale says. "It doesn't grant the kind of change we were all hoping for, but it gives a modest amount of relief."
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