• BANKRUPTCY/MERGER UPDATE
• PLAN OF REORGANIZATION CONFIRMATION HEARING
• WHERE IS MY CONTRACT?
• MEC MEETINGS
• Accessing The Hub
• AFA Local Numbers

BANKRUPTCY/MERGER UPDATE

The Plan of Reorganization was approved by the US Bankruptcy Court on Friday September 16, 2005. The centerpiece of the plan is the merger agreement between US Airways and America West. US Airways is expected to exit bankruptcy and close the merger deal on September 27, 2005. The combined airline expects to have about $2.5 billion on hand. The money comes from the airlines current holdings and the previously announced sale of some assets, plus new money from a variety of investors. 

Although the corporate merger is days away the operational merger of the two carriers is not expected to take place for at least 18 months. Between the time of the corporate merger and the operational merger numerous events must occur. Among those are negotiated transition agreements, integration of seniority lists and merged collective bargaining agreements. Work on these items is just beginning. Meetings will take place this week between us, our AWA counterparts and management on the transition agreement. I will report the details of those meetings to you at the end of the week. 

Internally, our seniority list is being verified and you will be receiving a mailing from the merger representatives soon for verification of your respective positions on our seniority list. 

As you know the America West AFA leadership is seeking to challenge the AFA Date of Hire merger policy at the AFA Board of Directors meeting in mid October. We will be posting details regarding that challenge and our response to it on our web site and through additional E-Lines in the days and weeks leading up to the meeting. We will do everything possible to defeat the proposed change to the Date of Hire merger policy.

PLAN OF REORGANIZATION CONFIRMATION HEARING

The confirmation hearing was the last step necessary for the company to exit bankruptcy. After examining creditors are given the opportunity to raise objections to the plan. AFA had the option to object to the plan. As we felt the merger plan was necessary for survival and also believed the plan would be approved regardless of our objection we took the opportunity to seek some contract relief in exchange for our support. We also reserved the right to object to the Executive Severance item in the plan that would provide exorbitant and in our opinion unjustified compensation to eleven senior executives who would not transition to the new company. Labor attorneys put on a good case against the compensation but not strong enough to sway the court. The combination of corporate greed and government approval of such practices defeated labor's objection. A management team that decimated labor contracts and terminated pensions has been rewarded for their efforts by the court with large severance packages in some cases equally four times their annual salary. 

The MEC was able to negotiate four items of contract relief:

• The Company agrees to pay sick time at 100% pay and credit for the first sick occurrence originating in a calendar year up to a maximum of four consecutive calendar days. Each sick claim thereafter in the calendar year will be paid at 70%. (Scheduled for implementation 1/1/06 but in no case later than 3/31/06)
• The Company agrees to extend medical/dental benefits to flight attendants on unpaid medical/maternity leaves of absence at the employee (Company paid) rate for a period of 270 days following the commencement of the unpaid leave of absence. (Scheduled for implementation 1/1/06)
• Pursuant to Company policy, flight attendants who are totally and permanently disabled (as determined by the Social Security Administration) and their eligible family members receive travel privileges on US Airways based on their seniority measured by active service at the time of disability. (Corporate Policy)
• The Company agrees to eliminate the letter entitled "Deadhead Pay and Credit" [Attachment C.6 of the 2004 AFA-US Airways Agreement]. 

The last item refers to the ALPA DH and Variable Minimum Rig calculation dispute. ALPA has reached a settlement with the Company regarding the rig calculation as a result of dead head and the rigs will now be recalculated to reflect pay for the rig time. Our rigs will be recalculated in the same manner as the pilots. We will be reviewing the settlement and application of its terms. The side letter would have required AFA to pay $7.5 million if our rigs are also recalculated as a result of the settlement. 

We will be publishing more specific details about these contract gains in the future.

WHERE IS THE CONTRACT?

We appreciate everyone's frustration regarding the delay in the completion and printing of the contract following ratification of the 2004 Transformation Plan Agreement. The job became more cumbersome than anyone imagined as the implementation committee had to combine the 2000 Agreement with the three restructuring agreements. Many sections of the contract had to be completely reworked. In addition many of the provisions of the 2004 agreement were new ideas, i.e. ETB, and required extensive work and examples. The work is almost done and we expect the final document to be sent to the printer in short order. We anticipate the document will be posted on theHub as soon as the final version is ready for printing. The implementation committee, Perry Hayes, Carol Austin and Mollie McCarthy are deserving of our thanks.

MEC MEETINGS

The MEC will hold meetings on October 4, 5 and 6 at the MEC Office in Pittsburgh, Pennsylvania. Please see the web site for further details.

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Accessing The Hub:

http://thehub.usairways.com 
Logging in the first time your user name is u0(zero) and your five digit employee number. Your initial password is the first five digits of your social security number. Questions about the Hub? Please contact the EDS Help Desk at 336-744-6000 for assistance. More information can also be found HERE.

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

Reply to Inflight: askinflight@usairways.com

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Your MEC Officers
Association of Flight Attendants
Hotline & *E-Line* - US Airways