• COMPANY TO OFFER FLIGHT ATTENDANT SEPARATION PACKAGE

• FLIGHT ATTENDANT SEPARATION PACKAGE Q AND A #1

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COMPANY TO OFFER FLIGHT ATTENDANT SEPARATION PACKAGE

When the Company announced the closure of the PIT domicile the Union was asked by members to approach the Company about a buyout or separation package. The members of the MEC directed me to formally ask the Company to consider offering some type of package.

The Union believed the closure of the PIT domicile would cause undue hardships to not only the members domiciled in PIT, but other members system wide who would be affected by the PIT displacements.

I sent the Company several different separation options for their consideration. The Company announced today, via CBS and a posting on the hub, a Flight Attendant Separation Package (SEP). Details of the package are below and have been posted on the hub and the AFA website at www.afausairways.org

You may click the link below to view the complete details of the package, however the key components are:

• 314 available SEP "slots"
• Must have accrued 15 years of seniority as of October 3, 2007
• $20,000 one time payout less applicable taxes and withholdings.
• Travel in accordance with Company policy- 25/45 or 65-point plan whichever is greater
• Three release dates and number of slots for each release date- March 5, 2008 (100), April 4, 2008 (100) and June 5, 2008 (114).

Flght Attendant Separation Package (SEP) Package
(Microsoft Word Document - Viewer Here)

The MEC met via conference call on Friday night to review the Company's final offer. The MEC believes that while the SEP may be attractive it is lacking in several areas- Travel and Payout- both of which we believe should be better. As late as Friday night we continued to ask the Company to improve these two provisions but in the end the Company would not move.

The MEC also expressed reservations with the SEP provisions regarding Flight Attendant performance. We believe our members do their jobs and are reliable and don't need to be subjected to the "carrot and the stick" approach with regard to SEP eligibility.

Nonetheless the MEC believed the good outweighed the bad and voted unanimously to accept the Company's offer and authorized me to sign the Flight Attendant Separation Package Letter of Agreement.

The letter is available on our website or by clicking the link below:

Flight Attendant Separation Package Letter of Agreement
(Microsoft Word Document - Viewer Here)

The Q and A that follows addresses some of the questions surrounding the SEP. There will be more questions to come and we will update the Q and A as often as needed.

Thank you,

Mike Flores, President
The US Airways Master Executive Council
AFA-CWA

~~~~~~~~~~

FLIGHT ATTENDANT SEPARATION PACKAGE Q AND A #1

Why is the Company offering a Separation Package (SEP)?

On October 3, 2007 the Company announced the PIT domicile would be closed in early 2008. The majority of the PIT flying would be transferred to CLT and DCA. The closing will result in displacements. AFA took the position that in order to reduce the number of displacements and offset the disruption to the lives of as many members system wide as possible in addition to offering a Flight Attendants a chance to leave the Company with a buyout package we would request the Company offer a Separation Package (SEP) to Flight Attendants.

Is any other work group being offered a SEP?

No.

Is the SEP only available to Flight Attendants domiciled in PIT?

No. The Separation Package will be offered in system seniority order to all East Flight Attendants who meet the eligibility requirements of the SEP.

Will the Flight Attendants currently domiciled in PIT have to submit displacement bids even if they plan to apply for an SEP?

Yes. The Company plans to begin displacing Flight Attendants out of PIT in February therefore it will be necessary to submit base preferences when the displacement notifications are made.

How does offering the SEP limit the displacements if the release dates are not until March, April and June?

Good question. The Company is not going to know who will be awarded the SEPs until late December- after the PIT displacements have been processed. Once the Company knows the results of both the displacement bid and the SEP awards decisions regarding actual displacements will have to be made. The Company has indicated the TDY process may be used to avoid permanent displacements. There is no way to know what will need to be done to properly staff the remaining domiciles until the SEP awards are known.

The process will also include a transfer bid early next year once the PIT displacement bid is closed mid November and the SEP awards are processed. The Company wants to limit displacements as much as possible.

Why is the Company limiting the number of SEPs offered to 314?

The Company's position is the main driver for the SEP offer is the closing of the PIT domicile and the displacement of the 314 active Flight Attendants. The Company has therefore limited the number of participants to that number.

Will the Company offer additional SEP slots if the package is oversubscribed?

The Company states they are under no obligation to offer any additional SEPs. The Union will continue trying to negotiate additional early-out programs, both in and out of single agreement negotiations.

Does a Flight Attendant who accepts a SEP remain on the system seniority list similar to the VFLR program?

No. Unlike the VFLR, a Flight Attendant awarded a SEP will separate from the Company and be removed from the system seniority list. This SEP is just that- a separation.

Why is one of the eligibility requirements that a Flight Attendant must have 15 years of accrued seniority as of October 3, 2007?

As with most types of early out offers the Company is no different than other Companies and wants to target the most senior employees for financial reasons. The Union made alternative proposals to the Company that would have made the SEP more expansive. Ultimately the Company rejected those proposals.

Another requirement is that a Flight Attendant must be in Active Status as of October 3, 2007 and must be in active status on the effective release date - (see next question)

What is definition of Active Status?

Active status for purposes of SEP includes flight attendants actively flying the line, claiming paid sick leave, taking FMLA/PCL leave, on military leave or VPLOA. Flight attendants on non-FMLA/PCL or non-military leaves of absence such as personal, unpaid medical, long-term disability, or voluntary furlough shall not be considered active.

Is there any health insurance available with the SEP?

The only health insurance options being provided in the SEP are COBRA in accordance with applicable law or the Company Access plan. COBRA benefits will be offered for the applicable 18 month period. Flight Attendants who have reached retirement age and are awarded a SEP will be able to access their PBGC benefits and in most cases that will allow the use of the Health Care Tax Credit (HCTC) to help offset the cost of COBRA. The Company Access Plan is not an eligible HCTC plan and therefore not a viable option. We will be publishing the current COBRA rates and updated HCTC information shortly.

The following link will take you to the AFA Retirement Booklet that was published in 2005.
http://www.afausairways.org/Benefits/pension_bk52605.pdf (Adobe PDF File - Viewer here)

What happens to the Sick Bank of a Flight Attendant awarded a SEP?

In accordance with our contract a Flight Attendant awarded an SEP who is retiree eligible will be able access to sick payout options as defined in Section 22.A. 4. of the Collective Bargaining Agreement. Those provisions are copied below:

(1) Employees retiring before age 65 who elect at the time of retirement to participate in retiree medical benefits (monthly contributions will be calculated as the total cost of the plan for pre-65 retirees and level of coverage the flight attendant elects: Option 1, Option 2, or Option 3, less the amount covered by accrued sick leave) may use accrued sick pay up to the maximum contained in the flight attendant's sick bank, even if such amount exceeds 1,500 hours, on the date of retirement to fund a portion or all of the monthly pre-65 retiree medical premium.

(2) For purposes of funding monthly pre-65 retiree medical premiums, an hour of sick pay will be valued at $8.20. Forty-one hours of accrued sick pay ($336.20) will be credited towards the monthly pre-65 retiree medical premium until the Flight Attendant's sick bank on the date of retirement is exhausted.

(3) To the extent that the monthly pre-65 retiree medical premium exceeds the available credit, the retiree will be responsible for timely payment of the premium in excess of the credit.

(4) In the event the retiree at the time of retirement declines pre-65 retiree medical coverage, or is 65 or older at the time of retirement, the retiree will be paid $6.70 for each hour of accrued sick leave in his/her sick bank at the time of retirement, such payment to be made in equal monthly installments over a twelve-month period, beginning within thirty (30) days of retirement, or a flight attendant may receive a one-time cash payment, within thirty (30) days of his/her retirement date. The retiree will not thereafter be eligible to participate in pre-65 retiree medical benefits.

Will the SEP package lead to recalls?

Yes. The amount of system wide flying will not decrease due to the closure of the PIT domicile therefore recalls will be necessary to replace those Flight Attendants awarded a SEP. Further information regarding recalls will be forthcoming.

Why are there three release dates?

The short answer is training. The fact that overall flying will not be decreased means that recalled involuntarily furloughed Flight Attendants will be needed to replace Flight Attendants awarded an SEP. In order to meet the needs of service and accomplish the necessary training three SEP release dates are necessary.

Why are the three release dates not on the first day of the month?

The Company established the release dates of March 5, April 4 and June 5 in order to avoid any carryover trip conflicts.

Why is the cash payout limited to $20,000?

The Union made several proposals to the Company that included higher cash payout amounts. As late as Friday night the Union was still pursuing a higher payout but ultimately the Company rejected those proposals.

Why is the travel provision of the SEP limited to Company policy unless an individual Flight Attendant is entitled to 25/45?

This was a major point of contention between the Union and the Company. The Union wanted travel benefits extended to those who may meet the 15 year seniority eligibility provision of the SEP but not qualify for either 25/45 or the 65-point plan. As stated earlier the Company is targeting more senior Flight Attendants to offset the financial impact to the Company.

What are the differences between 25/45 and the 65-point plan?

25/45 Plan: The Collective Bargaining Agreement stipulates that should a flight attendant reach 45 years of age and attain 25 years of service as a Flight Attendant, they may separate from the Company and receive lifetime travel benefits as if they were active. Current retiree travel benefits will entitle a flight attendant to unlimited on and offline travel for yourself and eligible family members. You will receive eight (8) companion passes and two (2) SA1 vacation passes each year, and your boarding priority will be set at S3 (active). There is a tax implication with this plan, and you would receive a travel card approximately two to four weeks after your separation from the Company

65 Point Plan: Your age plus your years of service equals or exceeds 65 points. You are therefore eligible to separate from the Company and receive retiree travel privileges in accordance with Company policy. Under this program, your status will be listed as that of resignee, and you will not be able to collect your pension benefits until you reach age 55. Current travel benefits associated with this plan include unlimited on and offline travel for you and your eligible dependents, boarding priority of S4 (inactive), and receipt of four (4) companion passes and two (2) SA1 vacation passes each year. There is no tax liability associated with this plan, and a travel card will be issued approximately two to four weeks after your separation date.

What happens to accrued vacation?

Any accrued 2008 accrued vacation not taken prior to the release date for a Flight Attendant awarded an SEP will be paid out. Any 2009 vacation accrued in 2008 prior to the release date will also be paid out.

At what rate will vacation be paid out?

Accrued vacation will be paid out at four (4) hours per day if the cumulative total of vacation days to be paid out is more than seven (7) days. Accrued vacation will be paid at three and one-half (3+30) hours if the cumulative total of vacation days to be paid out is less than seven (7) days. A Flight Attendant need not have scheduled vacation in seven (7) day periods to receive the higher rate. If the total number of vacation days to be paid out is greater than seven (7) days then the higher rate applies.

Why is the SEP required to be posted for 45 days?

The Age Discrimination in Employment Act of 1967 provides that a group of employees offered an "exit incentive" must be given a period of at least 45 days within which to consider the offer.

What happens if a Flight Attendant submits an application form and bid for the SEP and then changes her/his mind?

Within the 45 day period an employee has a seven (7) day period after submitting a SEP application form and bid to notify the Company and revoke the SEP application and bid. A Flight Attendant waiting until the last day of the 45 day period to submit an application and bid form will have no opportunity to have the application and bid form revoked.

What is the SEP Release form and why must it be submitted?

Also known as a "Release of Claims", this form acknowledges that, inter alia (among other things), an employee was given a forty five (45) day period to consider the SEP. The form also releases the Company from any further claims by an employee in exchange for the cash pay out and any other benefits associated with the SEP program.

Will a Flight Attendant awarded an SEP be allowed to change her/his mind?

No. Once awarded an SEP a Flight Attendant will not be allowed to change her/his mind and remain with the Company.

Thank you,

Mike Flores, President
The US Airways Master Executive Council
AFA-CWA

~~~~~~~~~~~~~~~~~

AFA USAirways Website

www.afausairways.org

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http://thehub.usairways.com 
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AFA Local Numbers

Council 40 PIT 412-245-1214
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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