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TRANSITION NEGOTIATIONS UPDATE

The joint US Airways/America West AFA merger negotiating committee walked out of Transition Agreement meetings with management on Thursday. After more than a month of negotiating management's position on key components of the Transition Agreement remain either unchanged or worse. Management has been unwilling to participate in addressing the merger concerns of both memberships and therefore we have suspended our participation. No further meetings have been scheduled. 

As a refresher, the Transition Agreement governs the parties during the period of Separate Operations. The period of Separate Operations began on September 27, 2005 and will continue until Operational Flight Attendant Integration. Operational Flight Attendant Integration will occur within twelve months after the Company has secured a single operating certificate, a merged collective bargaining agreement (CBA) and a merged seniority list. The Company has targeted April 2007 for obtaining a single operating certificate. 

As you know a large part of our CBA works in conjunction with the US Airways ALPA CBA. ALPA and the Company have reached a Transition Agreement that in effect creates a fence during the period of Separate Operations. In short, America West Pilots can't fly US Airways aircraft and vice versa. Since we can only fly with US Airways pilots our current and announced flying is protected and governed by the ALPA Transition Agreement. 

During the period of Separate Operations and until a merged CBA is negotiated and ratified our contract remains in full force and effect. In the past Transition Agreements for AFA were for the most part straightforward. Until a merged CBA existed and integration took place everyone stayed in their bases and remained governed by their respective CBAs. At that point a fence no longer existed and life moved on. 

These negotiations have been a little different. Management of America West and US Airways decided to insert themselves into union affairs and issued a Joint Statement of Labor Principles signed by Doug Parker and Bruce Lakefield that indicated how they believed seniority lists should be integrated. Doug Parker continues to say the AFA Merger Policy of Date of Hire (DOH) is not fair and equitable. We disagreed with the Company's position as well as the America West AFA leadership's attempt to change the policy at last months AFA Board of Directors meeting. The DOH policy remains and both memberships must operate within the AFA Constitution and Bylaws. 

In previous mergers we have never negotiated a post integration fence. However, the MEC and the US Airways AFA merger negotiating committee, Carol Austin and I, decided to entertain the thought for this merger. Since management caused the problem by deciding to become part of our seniority integration we decided to include them in the solution. A fence often creates more problems than it solves but the joint committee worked very hard to come up with an internal agreement that would benefit both memberships. After weeks of internal AFA negotiations we decided to offer a post integration fence to the America West flight attendants if the Company met certain conditions. Specifically we proposed an 18 month limited fence for transfers into or out of PHX. The fence would be limited to vacancies caused by attrition. Any such vacancies would be filled by Involuntary Furloughed US Airways flight attendants or new hires. Vacancies caused by growth, furloughs or displacements would be exempt from the fence and filled according to DOH system seniority on the combined list. In exchange for this concession from the US Airways flight attendants we would require the Company begin our 3% Defined Contribution in January of 2006 rather than 2008, reinstate the NTI premium pay and match any pay increases America West flight attendants might receive as part of their ongoing Section 6 negotiations. 

The response from management was no, no and no. They stated a post integration fence was not something they needed or wanted and certainly would not pay for. What management really wanted was a fundamental change to the AFA Merger Policy and when they didn't get it they abandoned their concern for the America West flight attendants' position swiftly and completely. So much for earlier management statements "that nothing should ever change in PHX." The remainder of the Company's proposal continues to expect America West AFA members suspend their Section 6 negotiations for 12 months. America West flight attendants have been in negotiations for the past 20 months and now are being asked to put everything on hold. The only thing that management wants not to change in PHX is the America West flight attendant pay rates and working conditions. 

Furthermore, in earlier meetings management stated they are in negotiations with Embraer to acquire an unknown quantity of Embraer 190 aircraft. This aircraft has a capacity of between 95 and 106 passengers with a 2300 nm range and it is management's desire to place the aircraft on mainline. Initial management proposals maintained existing mainline pay rates but without senior pay premiums for the Embraer 190. In their last proposal management withdrew the mainline pay rates altogether. The Embraer order has not been placed but if those aircraft are obtained and placed on mainline we would insist on mainline pay rates including senior pay premiums. There will be no "B" scale for the Embraer 190. 

Management also continues to offer a nominal amount of money to cover the costs and expenses to the union for the negotiation of a single CBA. Well, so much for the "fair and equitable" statements made by management. Mergers cost money and AFA members are not going to pay for the Company's merger in any way. 

The Company proposal does contain provisions for the hiring of Involuntary Furloughed US Airways flight attendants to fill approximately 225 vacancies in PHX during the period of Separate Operations. Those flight attendants would be considered America West employees during that period and would be at the bottom of the seniority list for bidding until integration or recall but would be credited with their US Airways longevity for pay and vacation purposes. The US Airways committee and the MEC agree with this part of the Company proposal. The America West AFA leadership however does not agree with allowing the longevity credit for pay and vacation purposes during the period of Separate Operations. Once we have a merged seniority list, CBA and Company that would happen anyway and we are in disagreement with their position. I have tremendous respect for the leadership and all members at America West AFA and I am hopeful we can come to a resolution of this disagreement. I feel this is a question of fundamental fairness in the same realm as not allowing an Involuntary Furloughed US Airways flight attendant to bump a more junior active America West flight attendant out of a job once the seniority lists are merged and integration takes place.

Doug Parker and the rest of the new US Airways' management say the merger only works if the two companies are fully integrated. Integration will only work if management AND labor are happy. I want a happy labor group but management NEEDS a happy labor groups. One only needs to look at recent airline customer satisfaction surveys to see that customer satisfaction is a function of happy and empowered employees." The beatings won't stop until morale improves" mentality must stop.

I am in complete agreement with America West AFA leadership and members in their fight for a resolution to their Section 6 negotiations and all the legal remedies they are entitled to. A merged agreement can wait. The truth is this Company is very well positioned financially. Capacity is decreasing and revenues are going up. Management and the new US Airways Group Board of Directors feel secure enough financially to award significant raises and stock warrants to their top four executives yet insist that labor agreements be cost neutral. 

The days of concessionary bargaining in the shadow of the bankruptcy court are over.

Thank you,

Mike Flores, President
US Airways Master Executive Council

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AFA Local Numbers

Council 40 PIT 724-695-3329
Council 41 DCA 703-212-8090
Council 69 BOS 781-289-8454
Council 70 PHL 215-492-0840
Council 82 LGA 315-736-3483
Council 89 CLT 704-527-0325

New Hotline Number Toll Free: 866-USA-AFA2
US AIRWAYS Benefits Information 800-872-4780

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