APA FLIGHTLINE Magazine Summer 2004

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The Task Ahead
PRESIDENT’S BRIEFING
BY CAPTAIN LLOYD HILL, APA PRESIDENT
You are only entitled to what you are able to negotiate and negotiating will only occur when leverage is applied. The amount
of leverage must be at least proportional to your desired aspirations.
Fact: The airline industry has f lourished and airline managers are lavishing themselves with hundreds of millions of dollars
through exotic bonus schemes. Base salaries have now been relegated to a mere fraction of airline managers’ total compensation.
At American Airlines, unprecedented management bonuses are now an annual event. The last two American Airlines
performance payouts together exceeded a quarter of a billion dollars. Those bonuses boosted overall management compensation
more than 900 percent since 2003.
In light of ongoing American Airlines product and service shortcomings—as evidenced by repeated dismal industry survey
results—many are left to wonder about the effects of such mammoth payouts. Do they actually serve to retain talent and stimulate
management engagement, or do they result in managers who are more interested in pursuing ancillary and personal interests
with their newfound wealth? Whatever your belief, there is no denying that management’s staggering financial rewards are
inversely proportionate to the substandard product and service bearing their work product signature.
In sharp contrast, the
American Airlines worker is
still suffering under dramatic
pay cuts and concessionary
working conditions. What
little employee bonus that
does exist has been severely
compromised or is outright
broken. In fact, beginning this
year, due to new IRS requirements, AA employees will be
paying for management bonuses. Such f lagrant management disconnect remains a bedrock catalyst for employee strife. And at
APA, we are also battling repeated contractual assaults, onerous and unilateral management safety changes, and a management
team intent on denigrating and harshly punishing loyal tenured employees for the smallest of perceived infractions.
Management’s persecution of loyal employees on a multitude of fronts truly knows no bounds.
Likely due to management’s seemingly boundless greed more than anything else, the entire labor force at American Airlines
finds itself at a defining moment. Given management’s historical negotiating intransigence—coupled with their continued
calls for more employee concessions during a time of company prosperity—management has left front-line employees with
two rather unattractive choices. The workers of American Airlines can simply submit to management’s concessionary
onslaught, or they can fight to participate meaningfully in our airline’s success.
As has been said time and again, it’s the crewmembers who saved this industry when they bravely climbed back aboard
immediately following the events of 9/11. They did so despite the fact there were far more questions than answers about
aviation security. How quickly our management has forgotten where we would all be today had it not been for the thousands
of exceptionally dedicated and brave employees that saved this airline.
The message sent loud and clear from the APA membership is that you want to participate meaningfully in our company’s
success, and you are willing to fight to do so. We all understand—membership and leadership alike—that the task ahead will
not be easy. Management has yet to express any willingness to compensate us for our 2003 sacrifices, let alone any additional
improvement or reward. To the contrary, management has repeatedly demonstrated they have no qualms about asking for even
more sacrifices. And so the only reasonable conclusion is that absent significant leverage, labor will be unlikely to participate
in our company’s success.
Pilots are by nature mission hackers who possess an innate skill set programmed to strive for perfection. Yet the road ahead
holds many obstacles and imperfections. For those of you who have never been down this bargaining (continued on page 4)
Flightline
The message sent loud and clear
from the APA membership is that you
want to participate meaningfully
in our company’s success, and you
are willing to fight to do so.
2
Fall 2007
from the VICE PRESIDENT
BY CAPTAIN TOM WESTBROOK, APA VICE PRESIDENT
It is our time to LEAD the profession.
It has been more than 75 years since the formation of the first airline pilot union, the Air Line Pilots Association
(ALPA), which was founded by 24 “Key Men” in a Chicago hotel room in July 1931. American Airlines pilots were an
integral part of the origins of ALPA, providing a rock-solid backbone for the fledgling union. AAL pilots played a monumental role in the early days of our profession to significantly improve the compensation, working conditions and
benefits of the professional airline pilot. The American Airlines pilots were considered the “tough guys” of ALPA, and
held three important distinctions:
• American pilots were the first pilot group to 100 percent organize.
• American pilots were the first to sign a contract (May 1939).
• American pilots were the ONLY pilot group to be firmly committed to following through with ALPA’s plan to
withhold their services during the threatened nationwide strike of 1933.
Beginning with the deregulation of the airline industry in 1978, the airline pilot profession experienced a slow
erosion. That steady erosion accelerated into virtual free-fall after the attacks of 9/11. One by one, the legacy carriers
turned to bankruptcy courts as a way to eliminate employee pension plans and extract Draconian changes to their
pilots’ collective bargaining agreements. This process resulted in the eradication of contractual provisions that had
literally taken more than
a half-century to achieve,
crushing the career aspirations of thousands of pilots
and destroying the financial
security of their families.
It was not so very long
ago when all airline pilots
aspired to have industryleading contracts in place at their airline. Today, threats of bankruptcy have made some pilots wary of achieving their
goals for fear of placing themselves too far ahead of their “competitors.” That time has passed. It is our intention to
achieve a contract in this negotiation that will set the standard for the industry.
I won’t kid you — the task before us is great, and it will not happen overnight. It will take a methodical, well
thought-out strategic plan. The first step in that plan involved seeking your input through the recent Membership
Preference Survey. With the survey results in hand, we’ve now developed specific negotiating proposals designed to
achieve the goals YOU articulated.
The process of actually forcing management to recognize our contributions to the success of this company will
require each of you to be actively involved. We must send them the message that without pilots, there are no such
things as PUP bonuses.
In the weeks and months ahead, your APA leadership will be calling upon you, and I ask that you answer that call.
It is imperative that you stay engaged. You can do this by doing the following:
The process of actually forcing
AMR to
recognize our contribution to the
success of this company will require
each of you to be actively involved.
• Volunteer for a local or national APA committee. No member will be turned away. Your National Officers
firmly believe that your APA should be about “inclusion,” not “exclusion.”
• Wear your APA pin proudly.
• Ensure that your contact information, such as home and cell phone numbers and e-mail address, is up-to-date.
• Read your e-mails from APA headquarters and your local domicile representatives.
Fall 2007
(continued on next page)
3
Flightline
PRESIDENT’S BRIEFING
(continued from page 2)
road, I encourage you to prepare accordingly. You should begin mentally preparing to be comfortable with the discomfort that lies ahead. Get ready for management’s propaganda barrage via HI6 messages, mailbox stuffers,
negotiating Web sites and so on. Be prepared for the tension management will create. But do not fall for the bait.
Nothing we do or don’t do will have any impact on management’s business decisions regarding new airplanes,
new routes and so on, no matter how frantic management’s argument or how harsh their finger-pointing.
Management will consistently strive to portray any union stance or tactic designed to achieve the best possible
contract as morally wrong or detrimental to the company. What you need to always remember is that management
also views anything you might achieve during bargaining as detrimental to the company. Management wants even
more from you as they siphon hundreds of millions of dollars for themselves. Whatever management robs from
you goes straight to their own pot of gold, which is expected to be in the neighborhood of $200 million come
April 2008.
More than anything else, here is what you need to remember throughout these negotiations: The Allied Pilots
Association has but a single bargaining charter, which is to enhance your pay, pension, benefits, work rules and
overall quality of life. We negotiate for you and only you. Management’s endeavor will be to make you the least
expensive “cost units” in the industry and their bonuses depend largely on achieving that goal. Just as vigorously
as APA pursues your interests, so too will management pursue theirs. If you keep this in mind when you read
management’s fodder, it will all be in proper perspective.
from the VICE PRESIDENT
(continued from page 3)
• Attend your local domicile meetings.
• If your schedule permits, attend APA Board of Director meetings. We are working hard to conduct as much of
these meetings as possible in open session.
• Prepare yourselves mentally and financially for the sacrifices we may have to make to restore our profession.
Each and every one of us is indebted to those pilots who came before us. The solidarity shown by AAL pilots in
the early days of our profession formed the foundation for the contractual benefits that they and we were able to
enjoy over the years. If we can harness the solidarity that is building daily in our ranks, I believe deep down that all
of us, the 12,000 pilots of American Airlines, can once again make this profession something to be proud of. I hope
you do too. Without your active support and unyielding resolve, achieving our collective goal of an industry-leading
contract is nothing more than a pipe dream.
No victory comes without preparation and a willingness to do what it takes to win.
Fraternally, —
Flightline
4
Fall 2007
BY CAPTAIN BILL HAUG, APA SECRETARY-TREASURER
S E C R E TA RY-T R E A S U R E R
Rewards and Loyalty at American Airlines:
Are They for The Employees, Too?
Fall 2007
In June 1981, American Airlines launched a ground-breaking innovation that would change the course of
airline history, and one that is greatly responsible, even today, for American’s success and strength: the first
“frequent f lier” program. Under Robert Crandall’s leadership, American Airlines had planned in secret for
months, perfecting the Sabre software that would drive the program. When it was launched, the rest of the
industry played catch up.
Surprisingly, whether or not to implement American’s frequent flier program was the subject of great internal
controversy at the time. Some inside American were afraid it would constitute corporate discounting, which was
taboo, and spark a destructive fare war. Director of Marketing Thomas Plaskett won the argument by pointing
out that individual customers would never allow their employers to take away their free travel awards; awards
would amount to a “kickback” based on the customer’s “individual greed,” according to Plaskett (“Hard
Landing,” Thomas Petzinger, Chapter 6: “The Empire Strikes Back” p. 141).
Thus was born a powerful loyalty program whereby American secured repeat business by playing upon
customers’ individual greed. When it comes to customer loyalty at AA, it is clear that “Greed…is good!”
(Michael Douglas as Gordon Gekko from the 1987 movie “Wall Street”).
Executive Greed, Executive Rewards
Fast forward to 2006 and 2007: American Airlines executives have fashioned a stunning stock-based
compensation program for themselves, claiming that, in spite of employee pay cuts, layoffs and other huge
sacrifices by rank-and-file workers, large improvements in management pay are essential to secure the loyalty
of AA executives. Supposedly, without such lavish rewards, AA executives might leave for greener pastures.
(Headhunters are calling, you know.)
An alphabet soup of executive payouts – PUP/PSPs, SARs, performance shares, career shares and cash – have
created from 2003-2007 an average increase in compensation of 900% for AA executives.
AMR CORP EXECUTIVES - REMUNERATION RECEIVED (ALL FORMS - CASH BASIS)
Named Executive (NEO)
2003
Chief Executive (CEO)
650,207
Sr. Operations Officer (COO)
388,558
EVP of Marketing
467,275
General Counsel
345,954
EVP Finance (CFO)
448,859
Total Remuneration
$2,300,853
2004
519,037
484,792
611,639
585,300
422,533
$2,623,301
2005
656,931
546,396
609,660
652,361
531,949
$2,997,297
2006
1,427,744
2,940,529
3,022,543
2,914,786
652,851
$10,958,453
2007
8,344,971
2,810,958
5,021,987
2,825,958
5,446,775
$24,450,649
* Estimated: includes actual PSP awards, bonuses, options exercised, annualized salary, etc. Source APA Director of Industry Analysis estimates.
At AA, when it comes to executive rewards and executive loyalty, once again it is clear that “Greed…is good!”
Imagine, executive compensation more than 10 TIMES what it was only five years ago!
Employee Rewards and Employee Loyalty: What’s in YOUR Wallet?
So, where do AA’s loyal employees fit it to this program? Obviously, if customers are being rewarded, and if
executives are being rewarded, and if “Greed…is good!” for customers and executives, it must be good for
employees as well? Right? After all, AA’s crosstown rival, Southwest Airlines, has built an entire business model
on that idea:
“If the employees come first, then they’re happy. A motivated employee treats the customer well. (continued on next page)
5
Flightline
SECRETARY-TREASURER
Flightline
The customer is happy so they keep coming back, which pleases the shareholders. It’s not one of the enduring mysteries
of all time, it is just the way it works!” – Herb Kelleher
Sadly, at AA we know that this is not the case. At American, the “generals eat f irst.” AA must earn more
than $500 million in pre-tax profits before AA employees even begin to receive profit sharing. Contrast this to
executive bonuses over the past two years (2005 and 2006), where AMR lost a combined $626 million, and
managers took out more than $250 million in PSP bonuses alone!
Contrast AA’s sharing of 15 percent of profits above $500 million, with Continental’s 30 percent of the first
$250 million, 25 percent of the second $250 million, and 20 percent of all above that. Southwest Airlines has
perhaps the most remunerative profit sharing formula in the airline business, sharing 10 percent of operating
profits (profits before subtracting the cost of financing the corporation…this would be approximately a $1 billion
per year cost for AMR Corporation).
To make the AA profit-sharing situation even worse, effective in 2006, ALL executive compensation schemes,
whether paid in cash or stock, including the PUPs, stock derivatives such as stock appreciation rights (SARs),
stock options, etc., must be included in AA’s salary expense line of the income statement, which reduces pre-tax
profit. As a result, AA’s loyal employees must help the company earn back ALL components of executive
compensation, before reaching the $500 million pre-tax earnings mark, where rank-and-file profit sharing
begins. At AA, the generals are not only eating first, when it comes to bonuses, they’re taking food off
the plates of the foot soldiers!
No wonder Mr. Arpey tells us that “we don’t understand executive compensation,” “we’ll just have to agree
to disagree,” and “morale is an individual choice” – a choice made much easier for executives than for workers,
for literally millions of reasons!
These problems with AA’s profit sharing program become glaringly obvious when one considers that under
the pre-2003 “variable compensation” plan, employees received maximum 8 percent payouts, or one month’s
pay, when the company earned $1 billion dollars pre-tax. Executives did not receive their Long-Term Incentive
Plan payouts unless employees received profit sharing.
Today, if AMR earns $1 billion pre-tax, employees receive one WEEK’S pay, not one month’s! Executives
receive bonuses whether AA is profitable or not!
This is your reward for helping AA avoid bankruptcy in 2003…a sharply reduced profit sharing plan!
What About the AIP Program?
In 2003, AA led some employees – even some union leaders – to believe that they would be rewarded with a
“snapback” of sorts through the Annual Incentive Program. Unfortunately, the AIP financial bonus for employees
does not even start until the company has achieved a 5 percent pre-tax margin, or $1.2 billion in pre-tax profits
on $24 billion in revenues! Once AA earns that $1.2 billion, employees would receive a 2.5 percent bonus.
Clearly, employee upsides and bonuses are very small, distant and unobtainable compared to executive
upsides and bonuses, which have already made our executives millionaires many times over. Employees receive
nothing, while executives receive millions and simultaneously complain that the company is not yet
sufficiently profitable!!
A message I have heard loud and clear from you during the previous National Officer campaign, during the
several domicile meetings we have attended, and on an almost daily basis via e-mail and Soundoffs is that it
is time for the pilots of American Airlines to participate in the rewards for our role in the survival
and recovery of this company!
We are worth it, we deserve it and we will not allow the existing inequitable compensation programs at
American Airlines to stand. With your resolve and your continued support and dedication, we will accomplish
the industry-leading contract we deserve.
6
Fall 2007
I N THIS ISSUE OF FLIGHTLINE
Fall 2007
F E AT U R E S
12
LET YOUR VOICE BE HEARD: Pilot Letter to Burdette
14
GUEST EDITORIAL: Readying for the AA
Negotiating Strategy
27
GUEST EDITORIAL: Your Investment in AMR
40
TRIBUTE: Captain Richard “J.R.” Lyons
C O M M I T T E E S / D E PA R T M E N T S
8
INDUSTRY ANALYSIS: “We” Pull Together –
“They” Win Together
10
SECTION 6 NEGOTIATIONS — Overview of Section 6
Negotiating Under the Railway Labor Act
11
FAMILY AWARENESS: The APA Family Awareness
Program: It’s Time to Get Involved!
13
STRIKE PREPAREDNESS: The Storm is Coming
19
CONTRACT ADMINISTRATION: F. Lee Gality
20
LEGISLATIVE AFFAIRS: Global Deregulation,
U.S./EU Open Skies and You
21
BENEFITS CALENDAR: Important Dates for APA Members
22
INDUSTRY ANALYSIS: Too Much Cash?
28
CADC: Working for Program Improvements
31
COMMUNICATIONS: Recall and Nostalgia
33
RECALLED PILOTS
REGULAR ITEMS
34
CLASSIFIEDS
38
FINANCIAL MATTERS: Pension Factors
38
IN MEMORY
39
APA CONTACT INFORMATION
SPECIAL INSERTS
17
UPDATED FAR Duty Limit Flow Charts/
International Rest Requirements Flow Charts/
ATC Delayed Departures (RFD Delays)
Flightline is the official publication
of the Allied Pilots Association,
representing the pilots of
American Airlines.
National
Communications Committee
Captain Karl Schricker (DFW), Chairman
Captain Kevin Cornwell (DFW)
First Officer Cynthia Dawson (ORD)
Captain Russ Dennis (MIA)
Captain David Duquemin (DFW)
First Officer Jason Goldberg (LGA)
Captain Chris Manno (DFW)
First Officer Scott Shankland (DFW)
Captain Dave Aldrich (MIA) Ad Hoc
First Officer Kent Calvin (DFW) Ad Hoc
Captain Mike Madar (DFW) Ad Hoc
First Officer Dennis Tajer (ORD) Ad Hoc
Communications Director
Gregg Overman
Communications Editor
Jennifer Arend
Design and Layout
Stacey Hull, Graphic Designer
Printing Services Manager
Bruce Rushing
SUBMIT ARTICLES TO:
Flightline
Attn: Gregg Overman
Communications Director
Allied Pilots Association
O’Connell Building
14600 Trinity Boulevard, Suite 500
Fort Worth, TX 76155 -2512
800.323.1470, ext. 2250
(DFW area: 817.302.2250)
E-mail: [email protected]
SUBMIT CLASSIFIEDS TO:
Flightline Classified Ads
Attn: David Dominy
Communications Coordinator
E-mail: [email protected]
Flightline’s editorial content must be generally
consistent with Association policies. The guiding
principle governing all submissions is respect for
one’s fellow pilots and for the Association.
Submitted articles should address issues pertinent
to the Association and its pilots, and must avoid
references of a personal or political nature.
All articles, including guest editorials, should
conform with policy positions of the Association, as
established by the APA National Officers, Board of
Directors, Constitution and Bylaws and Policy
Manual. The responsibility for monitoring editorial
consistency is shared by the National Officers,
members of the Communications Committee and
the Director of Communications. The President has
final authority over all content.
www.alliedpilots.org
7
Flightline
BY DREW KEITH, APA DIRECTOR OF INDUSTRY ANALYSIS AND FIRST OFFICER DENNIS TAJER
I N D U S T R Y
A N A LY S I S
“We” Pull Together –
“They” Win Together
Recall that this table and its reporting guidelines are
Beginning this year, the Securities and Exchange
the same for every company, pursuant to FAS -123R.
Commission requires companies to more completely
(See AMR’s 2007 proxy statement p.32 for more detail).
disclose what they are paying their top five named
executives officers (“NEOs”). The methods
AMR Executive
Base Salary 1 Total Compensation 2
used to determine both the form and
Arpey, Gerard J.
581,534
10,201,059
amount of executive compensation are
Horton, Thomas H.3
456,522
7,841,134
typically reported in each company’s
Garton, Daniel P.
512,378
6,315,706
annual proxy statement.
Reding, Robert W.
471,973
4,607,112
Recently, significant changes to the guideKennedy, Gary F.
457,728
4,525,192
lines that must be used when reporting execTotal
$33,490,203
utive compensation were made by the SEC.
Note: This is as reported in proxy statements filed with the SEC on a GAAP basis.
1. AMR executives’ “minimum guaranty”
All companies are now obligated to report
2. Includes base salary, stock awards, option awards, and other
executive compensation using a revised stan3. Includes $894,014 for moving and relocation expenses, including purchase costs and any
losses related to the purchase and eventual sale of prior residence in NJ.
dard: Financial Accounting Standard (FAS) –
The level of compensation for AMR’s NEOs is sub123(R). The intent of this mandate is to make disclosure
stantial, but how does it stack up to the compensation
of executive compensation more complete, easier to
of NEOs at the companies with which AMR competes?
understand and more readily comparable to the
The following comparison table presents the TOTAL
executive compensation of other companies.
compensation for the NEOs at each respective airline
Let’s look at AMR’s method for determining how
company (as reported in each company’s most recent
much to pay its NEOs. The most interesting part of
proxy statement). The only exceptions are NWA and
AMR’s compensation methodology is the 32 companies
Delta, which due to bankruptcy proceedings filed an
that form AMR’s designated comparator group. The
amended 10K/As with the required information. The
Compensation Committee of AMR’s Board of
Total Compensation column represents the sum of
Directors uses this comparator group to select a
each company’s “Summary Compensation Table.”
median “target” compensation level (AMR 2007 proxy
statement p.21). The comparator group is comprised Company
Total
AMR Equivalent
of the following companies:
Compensation of each Company
Goodyear
Continental
AMR
33,490,203
Baseline (100%)
Heinz
Delta
*UAL1
25,813,170
130%
FedEx
Honeywell
2
*FedEx
25,269,690
133%
NWA
JC Penney
*Continental
23,804,996
141%
SWA
Johnson Controls
*UPS
14,154,435
237%
UAL
Lockheed Martin
UPS
Motorola
*US Airways
11,922,222
281%
USAir
Northrop
*Northwest
7,351,337
456%
3M
Raytheon
AirTran
5,798,834
578%
Alcoa
Sara Lee
Alaska
5,612,685
597%
Boeing
Target
*Southwest
5,514,018
607%
Burlington Northern
Texas Instrument
JetBlue
2,259,837
1482%
Caterpillar
United Tech.
Coca Cola
Weyerhaeuser
2,163,789
*Delta
1548%
John Deere
Whirlpool
*Denotes AMR designated comparator group company (AMR 2007 proxy statement p. 21).
1. UAL exited bankruptcy in Feb 2006 and awarded its executives massive and stock
General Dynamics
Xerox
options. These awards, which were included in UAL’s “Summary Compensation Table,”
totaled $65.9 million. In order to reflect a more accurate and comparable compensation
It’s interesting to note the inclusion of FedEx and
total, UAL provided a “Modified Summary Compensation Table.” This modified table
UPS as well as some other very successful companies.
only included stock that was vested in 2006, and utilized the Black-Scholes option
pricing method for options granted. This “modified” total compensation is utilized.
Now look at the reported executive compensation
2. FedEx’s total is from its 2006 Proxy Statement. FedEx files its proxy statement in
for 2006 in AMR’s “Summary Compensation Table.”
August due to its non-calendar fiscal year.
Flightline
8
Fall 2007
The average total compensation for the (*) comparator airline companies is $16.3 million. AMR is
more than twice as much as the average of the comparator airline company executive compensation.
The median total compensation of the (*) comparator airline companies is $14.2 million. AMR is
almost 2.5 times as much as the median of the comparator airline company executive compensation.
Another key area of interest is the estimated payments to AMR’s executives in the event of a “change
in control” (AMR 2007 proxy statement p.46-47).
Change in control generally occurs in the event of
merger, consolidation, reorganization, sale or other
disposition of a majority of AMR assets. If any of
these events occur, “the ripcord on the infamous
golden parachute gets pulled” – meaning all future
(not yet vested) incentive compensation awards and
employment contract severance considerations, etc.,
are accelerated for AMR’s executives and management.
The table to the right shows the estimated totals
AMR’s NEOs receive in the event of a change of control.
These totals are based on the AMR stock price at the
end of 2006 ($30.23). If the stock goes up, the value of
these “golden parachutes” will increase, and vice versa.
AMR Executive
Arpey, Gerard J.
Horton, Thomas H.
Garton, Daniel P.
Reding, Robert W.
Kennedy, Gary F.
Total
Golden Parachute
38,543,657
16,809,543
21,723,112
12,612,709
15,571,098
$105,260,119
For those who want to see each company’s proxy
statement, they are easily viewed at each company’s
Web site, typically through the “investor relations”page.
AMR’s proxy is available through this link:
www.shareholder.com/aa/edgar.cfm?DocType=Proxy&SECYear=All
Drew Keith is APA
Director of
Industry Analysis
FO Dennis Tajer
is a Chicago-based
S-80 pilot.
CAN’T AFFORD TO GIVE THE PILOTS A RAISE?
In August 2004, rising fuel costs caused the Air Transport Association to urge Congress to hold urgent oversight hearings
on what they described as “a catastrophe for the airline industry.”
Since 1999, AMR’s annual fuel bill has gone up 277 percent — an increase of $4.7 billion. Every 10 percent we pilots
receive in pay restoration costs the company $155 million annually. You do the math! Is that a “catastrophe” as well?
Fall 2007
9
Flightline
SECTION 6 NEGOTIATIONS
Flightline
Overview of the Section 6 Negotiating
Process Under the Railway Labor Act
BY FIRST OFFICER JASON GOLDBERG, COMMUNICATIONS COMMITTEE
Many APA pilots have not experienced the process of negotiating a contract under the Railway Labor Act,
except for the truncated process that led to the concessionary 2003 agreement.
APA Communications has prepared the following plain language chronology outlining the process in order
to ensure that all APA pilots understand what lies ahead. It is important to note that the process can cease at
any point in the timetable below if the parties reach an agreement in principle. If an agreement in principle is
ratified by the APA Board of Directors in accordance with the APA Constitution and Bylaws, it becomes a
tentative agreement (TA.) The TA is then subject to membership ratification and, if ratified, becomes the new
collective bargaining agreement.
Step 1- Section 6 Notices Served
• Six months before the contract becomes amendable (earlier by agreement) either party may serve “Section 6
notice,” notice of intent to change or amend the existing collective bargaining agreement.
• AMR served APA with the Section 6 notice in July 2006, initiating the bargaining process.
Step 2- Direct Negotiations
• The parties negotiate directly, without direction or assistance from the National Mediation Board (NMB).
• APA and AMR began direct negotiations shortly after AMR served APA with Section 6 notice.
Step 3- Application for Mediation
• One or both parties decide that direct negotiation is no longer productive and request mediation.
• The NMB assigns a mediator to the case.
• The mediator decides when, where and for how long the parties will negotiate.
Step 4- Proffer of Arbitration and Release to Cooling Off
• Either party may request that the mediator declare an impasse and release the parties from mediation.
• The NMB decides that further negotiations will not be productive and offers binding arbitration to both parties to
resolve any outstanding items.
• The offer of binding arbitration is typically rejected.
• The NMB releases both parties to a 30-day countdown, or “cooling off” period.
• The parties meet to negotiate during the “cooling off” period in a process known as “super mediation."
Step 5 (Conditional) - The Presidential Emergency Board
• During or after the 30-day “cooling off” period, the NMB may recommend that the president create a “Presidential
Emergency Board” (PEB).
• The president may convene this board and the PEB could take up to 30 days (longer by agreement) to submit its report.
• The PEB presents its report, which may include a recommended solution to the unresolved issues. An additional
30-day “cooling off” period then commences, after which either party is free to engage in self help.
Step 6- Self-Help
• The union is free to indulge in any work action, up to and including a complete withdrawal of services.
• The company is free to impose terms on any open contractual items and hire replacement workers.
10
Fall 2007
BY CAPTAIN STEVE HART, FAMILY AWARENESS COMMITTEE CHAIRMAN
The Family Awareness program, which began
in 1990, puts pilot families in contact with
each other in a specific geographic area.
The program served the pilots of APA very
well during the negotiations for contracts
1991 and 1997.
The Family Awareness
program can act as link
between a pilot and his or
her spouse and other loved ones, especially during a
stressful time such as a natural disaster or negotiations.
Our Family Awareness network strives to provide
pilot families with local information on things such
as schools, churches and physicians. We provide local
support to various charitable programs, as well as
coordinate social functions for pilots and their families.
Contract negotiations can be stressful period for
families. A properly informed and supported family is
the most effective way to reduce stress during difficult
periods. During the contract 1997 negotiations, Family
Awareness conducted regular meetings, teleconferences
and sent newsletters to families every two weeks.
Although our communication technology has greatly
improved, we still find that person-to-person interaction is the best. Rumors, hearsay and incorrect media
reporting can have a very demoralizing effect. Family
Awareness meetings become, by far, the best way for
our spouses and others to stay properly
informed on various issues. Family members
get good factual information and needed
mutual support in a relaxed, casual setting.
As this negotiation process moves
forward, the number of
Family Awareness activities
will increase. Get involved.
Remember, management
uses many measurements to try to gauge the decisiveness of the pilot corp. One of those measurements is
our involvement in Family Awareness. Let’s show
them how committed we are. Not only will your
family benefit, but an informed family will greatly
benefit you.
Families come first. Please join us in our efforts.
Call 1.800.323.1470, ext. 3302 or send an e-mail to
[email protected]
g{tÇ~á
CA Steve Hart is a
Los Angeles-based 767 pilot.
FAMILY AWARENESS
The APA Family Awareness Program:
It’s Time to Get Involved!
Scholarship Fund Contributors,
We just wanted you to know how much we appreciate
the generosity of the pilots who donate to the APA
Scholarship Fund and the Committee’s consideration
to support Laura and Brandon.
Laura Smith
Fall 2007
Sincerely yours,
Patsy Smith
Brandon Smith
11
Flightline
Let Your Voice Be Heard
The letter below is a response from one pilot to AMR Vice President-Employee Relations Mark Burdette’s letter,
dated Sept. 14, to the pilots of American Airlines concerning the current pace of our Section 6 negotiations.
Mr. Burdette’s letter constitutes direct negotiating with pilots, a practice strictly prohibited during Section 6.
Dear Mr. Burdette,
pilots regarding your disappointment at the
Thank you for your recent letter to me and other
s with AMR. I was most flattered that you
Allied Pilots Association's intransigence in negotiation
worth! In response, I will try to be more concise.
included me in your thoughts, giving me two pages
to the safety of those in my charge. I take this
I am a professional, responsible for and committed
igm-changed world you would have pilots
responsibility most seriously. Since in your ideal parad
accept pilots less, shall we say, dedicated.
working for subsistence wages, I assume you would
d by supply and demand and restricted or not
Everything, including safety, would be determine
true? Consider the huge lowering of standards
according to the economic winds of the time. Not
keeping those few who “qualify” and stay. I
for new-hire pilots at Eagle, and in your difficulty
at Eagle and spreading to American.
assume you would delight in this trend continuing
, we can see the future by looking into the
What will be the effects of such continuation? Sadly
is illustrative: Two poorly trained and no doubt
past. The crash of Helios Airlines in August, 2005
ot, were unable to adequately communicate
poorly paid pilots, one German and one Greek Cypri
urization problem their lack of training and
with each other in English when faced with a press
ngers and crew died as a result. Helios
professionalism caused, then exacerbated. All passe
and criminal charges against the airline were
offices were raided by authorities after the crash
nse was to change the airline’s name to Ajet.
considered, if not brought. Management’s respo
on management responses to carnage and
Indeed, “rename and repaint” have been comm
What will be your submission for new name
death at various airlines throughout the decades.
rably sullied by shoddy operations?
after the words, American Airlines, have been irrepa
at American. Reduced pilot compensation
I will not allow the lesson of Helios Airlines to be lost
ished professionalism and reduced safety.You
will necessarily result in lowered standards, dimin
five or 10 years down the road, should you get
should seriously consider the dire consequences
what you now seek.
with you or anybody else. To save it from
So let me be clear. I have no interest in negotiating
Together” promise you made and have now
bankruptcy, and as part of the “Pull Together, Win
standard of living several years ago and now
reneged on, I naively loaned American Airlines my
something in return for any portion of it is an
will have it back. That you expect me to give you
not negotiate to get back that which is mine,
old game once played by the Chicago mafia. I will
pay and benefits to subsidize the government,
enjoyed before I took a 50 percent cut in combined
ses.
the economy, this airline and its executives’ bonu
resolve, I will not budge. You can go on being
my
and
s
belief
my
As one firm in my integrity,
disappointed.
profession deserve no less.
The safety of my passengers and integrity of my
Sincerely,
Bruce Smith
737 Captain, Los Angeles
(Published with permission.)
Flightline
12
Fall 2007
BY CAPTAIN ROB SPROC, STRIKE PREPAREDNESS COMMITTEE CHAIRMAN
Securing a great contract for all pilots at this
airline is the Strike Preparedness Committee’s driving
motivation — a goal that will require unity and
resolve on the part of all of our union members.
We have a team of dedicated, bright and energetic
volunteers at the national and local levels who are
organizing and working diligently as you read this.
In the months and year ahead, you will hear more
from your national and domicile Strike Preparedness
Committees as we begin ramping up our levels of
pilot unity. For now, here are a few things to keep in
mind. You have heard them before — and you will
hear them again.
1. Stay Legal. A legal, national campaign protects
the membership and APA. In the near future, you
will be hearing much more from us about our
rights and obligations under the Railway Labor
Act and the National Labor Relations Act. APA
SPC is, by definition, in place to direct and execute
legal events in accordance with all federal and
state laws. We will be asking for your support and
compliance in the coming months. This only
works if we stay together as a group of determined
professionals.
2. Prepare Your Finances. To get the contract
we deserve, we will have to be unified with a high
degree of resolve. This means we will have to make
sacrifices up to the point of being released to selfhelp and an all-out strike. Structure your budgets
to exist with the minimum amount available.
Make no mistake — this may become the most
contentious negotiation in our history.
a. Start building your strike fund now, if you
haven’t already done so.
b. Reduce your debt and if possible, develop
other sources of income.
c. Reopen your American Airlines Credit Union
account if you have closed it. This will come
into play as we close in on a strike date.
we send you in multiple
forms, such as targeted
e-mails, base and APA
national blasts, and check the
APA Web site for new information
from APA national as well as from your domicile
representatives. Update your contact information
on the APA Web site (see page 38), at a minimum
your mobile phone and e-mail address. Sign up
for events and committees, especially the SPC.
5. Think Unified — Stay Unified. Unity is
the bond that holds us together. Management and
labor are natural opponents in the competition for
corporate profits. Management has shown that
they know how to take care of themselves at
labor’s expense. We will show them that we know
how to take care of our own interests.
6. Study Your History. If you have read
“Confessions of a Union Buster,” “Hard Landing,”
“Flying the Line” (parts I and II), dig them out
and read them again. Highlight the parts that
apply to contract negotiations and spread these
lessons in the cockpit.
7. Speak Up. Be sure that you send us your
ideas. We will have to think “out of the box” this
time around. Use your Soundoff, call your
domicile representatives and give us feedback at
817.302-2400.
It is time for us to demonstrate that we are a
labor union. We are unified for a common and
just cause with an iron resolve. This is the only
way to get a fair and equitable contract for the
pilots of this airline, for our families and for our
future. The very survival of our profession may
depend on it!
Special thanks to FO Bron Madrigan for contributing
significantly to this article.
3. Prepare Your Families for What Lies
Ahead. The national and domicile Family
Awareness Committees are becoming more active
and will soon assist in this endeavor.
4. Pay Attention and Get Involved. We
will begin many unity operations in the months
ahead. You need to pay attention to information
Fall 2007
CA Rob Sproc is a
Miami-based 737 pilot.
13
STRIKE PREPAREDNESS COMMITTEE
The Storm is Coming
Flightline
Guest Editorial
Readying for the AA
Negotiating Strategy
BY FIRST OFFICER GREG SHAYMAN
As you are aware, APA suspended contract negotiations with management while the membership survey was
being conducted. The APA Policy Manual requires a survey of the membership every 18 months while in contract
negotiations. The APA Board of Directors and National Officers are reviewing the survey results and are providing
the APA Negotiating Committee with clear direction as APA resumes direct negotiations with management.
Before we start putting the cart before the horse, it is imperative we all understand AA management’s negotiating
strategy. Their modus operandi will remain unchanged from past negotiations because management knows
their strategy has been very effective in achieving their desired results. Buzzwords and terminology used by
management may change, but the techniques will not. In the end, their goal remains steadfast — have the
pilots of American Airlines perform the most amount of work for the least amount of pay, work rule perks and
benefits possible.
THE AMR STRATEGY
PART I – MANAGING PILOT EXPECTATIONS
“We cannot afford it.”
Well before management served APA with “early openers” last September, they were already laying the
groundwork to lower your expectations vis-à-vis what American Airlines can and cannot afford in this contract.
If you regularly read the newspaper, visit Web sites with industry-related news, or listen in on AMR conference
calls with analysts and reporters, then you know what I am talking about. Even though management began to
pay off debt and amass cash over the past four years, they have always concluded their comments with wellrehearsed quotes such as these:
“We’ve made great progress, but we also realize the many challenges that lie ahead.”
“First, we have to lower our costs to levels that are more competitive. This will prevent the lower-cost
airlines from pushing us out of the markets we want to serve.”
“We must remain mindful that painfully high fuel prices and continuing intense competition present
formidable challenges for the remainder of the year and beyond.”
Remember that despite the fact that management has paid off billions in debt and has increased their cash
on hand by more than $4 billion in the past four years, they continually want to leave doubt in your mind about
the financial solvency of the company.
“If we don’t get productivity concessions, we’ll continue to shrink.”
We are hearing that same line from management today. “If you just become more productive, we will grow
the airline.” Of course, management will never guarantee any growth in writing, so their “promises” of growth
are nothing more than hollow rhetoric. Growth and/or new aircraft will be dictated by management, not the
pilots’ hourly rate of pay, what our work rules allow or don’t allow, or how much our benefit package is worth.
Flightline
14
Fall 2007
Guest Editorial
Furthermore, total pilot costs to the entire AMR operation are miniscule, amounting to less than 7 percent
of the total cost structure.
AMR management is already implying that we are “overpaid” and “unproductive” in various media
dispatches. Bank on more rhetoric to follow about how we are the highest paid in the industry by almost any
measure. (Of course, they will omit that that is in comparison with only the legacy carriers that have been in
bankruptcy).
PART II CARROTS
A tried-and-true management tactic is to dangle a carrot or two and hope that pilots bite. There were carrots
involved in the B-scale contract of 1983, the contracts of 1987, 1991 and 1997. Carrots come in many shapes
and sizes.
New Airplanes
Expect there to be new aircraft involved in this negotiation process. This tactic has been used by management
for more than 25 years. The most recent occurrence was in 1997, when AA unveiled a beautiful new 777 inside
a hangar at DFW to coincide with our announcement of the new 777 and 737 orders. This announcement
actually occurred just before the pilots were to vote on a new multi-year tentative agreement. (It didn’t work,
however. The pilots voted down that agreement, to management's surprise, leading to our short strike in
February 1997).
New Routes
We’ll grow and expand into new routes if you’ll just give us productivity changes on X, Y or Z.
Growth
Agree with us to do this and we can grow the airline again. Once again there will be no guarantees offered
other than the guarantee that management will implement your end of the deal.
PART III COMPANY BARGAINING TACTICS
AA Negotiations Web site
As you are probably aware, management has started a “negotiations” Web site that has only one desired
effect: To make us look as unproductive as possible to the public, our co-workers in other work groups and,
most importantly, to our own pilots. AMR management’s two most important goals in this contract are
“productivity increases” and “hourly wage containment.”
Keep in mind that management will use only “select” information to get to a pre-determined result. For
example, on their Web site, they won’t mention things like…
• The fact that we f ly a complex hub-and-spoke network versus most low-cost carriers
• That AA operates multiple fleet types with inherent inefficiencies
• The fact that AA pilots are free to f ly up to 85 hours per month
• Pilot pay at AA versus the much higher paid pilots at FedEx, UPS or Southwest
Leaks and Rumors
Once negotiations resume, you can expect management to attempt an end-run around the negotiation table.
They do this by leaking or planting certain information to the pilots via various sources. (continued on next page)
Fall 2007
15
Flightline
Guest Editorial
This misinformation campaign rarely contains anything even close to what has actually been discussed at the
negotiation table. It is a diversion tactic that is another extension of the expectations management program
described above. For this reason, it is of utmost importance that you get and devour information from APA.
Psychological Warfare
There isn’t a better way to describe this. AMR management will go to great lengths in an attempt to destroy
your will to fight. You must expect management to resort to every means possible in an attempt to discredit
you. You will be made out to be a lazy, overpaid, greedy person that never works. Management will claim that
your “unreasonable” demands will kill the airline’s ability to compete in the marketplace. They will expand
this rhetoric to other AA work groups, intimating that our greedy demands will end up preventing them from
achieving any future gains – and many of your colleagues will, unfortunately, believe it.
Prepare your family, friends and neighbors to expect this onslaught. Remember, it’s an attempt to wear you
down psychologically. When confronted with this misinformation, just treat it for what it is – garbage.
However, treat your fellow employees with dignity and extend kind, calm reassurances to those affected.
As we move through the process, management will stop at nothing to crush your resolve. Keep yourself from
getting sucked into the mind campaign. Stay informed and keep abreast of events and the information that
APA is providing you.
Remember, management’s hope is that you will be so tired of process, that you will just cave and “fold your cards.”
PART IV – THE END GAME
This particular contract negotiation is not about give-and-take…we already gave at the office in 2003 and in
1997. Contract 2008 is about recouping our rates of pay, factoring for inf lation, and making significant strides
in work rules, scope and benefits.
The stark reality is that management will play hardball until the bitter end. They will do everything in their
power to cause the pilots to make an emotional decision instead of a factual decision. There is no such thing
as a “special relationship” between APA and management. It is all about the “bottom line” to management.
“Pull Together/Win Together” was just another meaningless catchphrase meant to distract the pilot group and
our union leadership from the real tasks at hand: protecting and enforcing our contract, preparing the battlefield
for contract negotiations, and building an army of more than 9,000 active AAL pilots who are willing and able
to go the distance for a bar-setting contract.
After Contract 1997, many pilots voted yes after the presidential emergency board process in order to finally
conclude a long, fatiguing negotiation. In this negotiation process, we must be different. We must make
management understand that dragging out the process is not in their best interest.
It is imperative that you keep your eyes on the ball and ignore management rumors and rhetoric to
intimidate you into taking a substandard deal at the negotiating table. If you don’t believe deep down in your
heart that we can achieve a bar-setting contract, then we are dead in the water. It should be our ultimate goal
to achieve a contract that everyone else in the industry (including UPS and FedEx) envies and strives to achieve
in future negotiations.
FO Greg Shayman is a
DFW-based S80 pilot.
Flightline
16
Fall 2007
FAA DOMESTIC CREW DUTY LIMITATIONS
FAR Gate Departure and Take-off Time
LEGALITY CHECKER
(Use this chart only when you will be on duty for more than 13 hours.)
(Calculate using the flow chart on opposite side.)
Flight Plan taxi-in time (at destination)
Flight Plan flight time
:15
+ ________
+ ________
+ ________
– ________
______
___
FAR Duty Limit is the point in time at which you MUST begin a rest period.
To calculate Latest Legal Take-off Time:
Enter your “FAR Duty Limit” (from opposite side)
Debrief time
+ ________
Subtract the SUM of the items below
from your “FAR Duty Limit.”
Known in-flight & taxi-in delays
SUM = ________
+ ________
– ________
______
___
Latest Legal Take-off Time = ________
To calculate Latest Legal Gate Departure Time:
Enter Latest Legal Take-off Time (from above)
Flight Plan taxi-out time
+ ________
4
Latest Legal Gate Departure Time = ________
SUM = ________
Any known departure taxi delays
Subtract the SUM of the items below
from your Latest Legal Take-off Time.
Revised 8/07
FAA DOMESTIC CREW DUTY LIMITATIONS
• UPDATED •
FAR Duty Limit Flow Chart
Over the last several months there has been a great deal of
discussion about crew member duty limits and rest requirements.
These discussions were fueled, in part, by a recent FAA clarification
of domestic rest requirements under FAR 121.471, commonly
referred to as the “Whitlow interpretation.”
In January 2001, APA published flow charts to provide pilots with
a tool to ensure compliance with the clarified FAR. After several
revisions to improve usability and accuracy, new charts have been
developed. We hope you will find this information useful.
Please forward any questions to the APA Flight Time/Duty Time
Committee at [email protected]
Revised 8/07
— Flight Time / Duty Time Committee
1
you legal again, your modified sequence becomes
what is known as your “base” sequence and is what
any pay protection calculations are based upon. If you
are reassigned off of your “base” sequence to do other
flying, the actual flying is compared against the “base”
sequence, and you are paid the greater of the two.
For example, assume a crew is scheduled for a threeday sequence that operates DFW-ORD-DFW-AUS on
Day 1. Delays in ORD make the crew misconnect to
the AUS flight. As the crew misconnected at home
base, their “rescheduled” “base” sequence is now
DFW-ORD-DFW. If the crew is later “reassigned” to
fly to MSY upon return to DFW and then deadhead
home the following day, then they will be paid the
greater of DFW-ORD-DFW or DFW-ORD-DFW-MSY/
layover/MSY-DFW. Their original sequence after the
misconnect is not considered in any pay calculations.
Anytime you are “reassigned” during a sequence
enter (and print) the following DECS entries:
‘Rescheduled’ (Section 2.II, 15.H.3-5) or a
‘Reassignment’ (Section 2.GG 18.E.1)
For further information in the ‘greenbook’, refer to
Q & A #91, 96, 97, 100, 101, 102, 105.
If you are legal and available for f lying that you are
scheduled to do (and that is actually scheduled to
actually operate), but management needs you to
perform other f lying instead, then the “other” f lying
is a “reassignment.”
If you misconnect or encounter a contractual or
FAR illegality for your originally scheduled f lying
and are thus unable to perform it, or if the balance
of a sequence cancels, you will be “rescheduled”
following established guidelines to make your
sequence “legal” again.
In the case of a misconnect or illegality, management’s obligation is to have you deadhead or fly back
to base on the first available f light(s) from the point
of misconnect or illegality.
In the case of a cancelled mid-sequence leg, or
cancellation of the balance of a sequence, management’s first obligation is to try to deadhead or fly you
to the next point of departure to pick up the balance of
the sequence. If unable to do that, then management
must deadhead or fly you to base on the first available
flight(s).
In all cases of a misconnect, illegality or cancellation,
after management “reschedules” you and makes
HSS/seat /sequence/date
This is what you are actually flying.
HSS/seat /sequence/date/B
Base sequence.
This is what you are being pay-protected for.
Remember, you will be paid the greater of
the two.
$100 and Our Contract vs. CPI-Urban (1977-2007)
$100 in 1977 Adjusted for Inflation
’97
Contract
’87
Contract
’91
Contract
’03
Contract
’83
Contract
’79
Contract
$100 Adjusted for
Contractual Changes
APRIL OF YEAR
Source for CPI-U: U.S. Department of Labor, Bureau of Labor Statistics. Actual CPI-U used through July 2007. CPI-U estimated to increase 3% (annually) for August 2007.
Fall 2007
19
TASC COMM. CONTRACT ADMIN.
F. Lee Gality
Flightline
LEGISLATIVE AFFAIRS COMMITTEE
Flightline
Global Deregulation,
U.S./EU Open Skies and You
BY CAPTAIN ROBERT COFFMAN, LEGISLATIVE AFFAIRS COMMITTEE
The Airline Deregulation Act has, of course,
changed our industry. The 1980s proved to be an
especially volatile time period for the airlines and our
profession. Those times are about to be replayed —
only this time, the deregulation playing field is the
entire world.
The U.S./EU Open Skies International Aviation
Agreement became reality on April 30, when it
was signed into existence by Secretary of State
Condoleezza Rice for the United States and EC Vice
President Transport Jacques Barrot for the European
Union at a ceremony that APA was invited to attend
in Washington, D.C. This ceremony was merely
symbolic. Legally, the document had to be translated
into each of the EU native languages and signed by
each of the 27 heads of state.
In the case of commercial passenger carriers, the
new traffic rights allow any carrier, regardless of f lag,
to carry passengers between any city pair, one being
in the United States and the other in a member state
of the European Union. The agreement takes effect at
the beginning of the International Civil Aviation
Organization summer travel season in 2008, defined
as March 31, 2008. Jockeying for position has already
begun in earnest, especially on the other side of the
Atlantic. Many prognosticate further consolidation
in the European carriers; certainly there is ample
evidence of this mood in the daily newspapers with
speculation of British Airways and Iberia merging,
British Midland with a “for sale” sign and so on. Virgin
Atlantic is making noises about serving U.S. cities
from Madrid, Paris, London and Frankfurt. British
Airways has already applied for and been granted
blanket authority to f ly to whichever cities in the
United States it wishes, under the new international
aviation agreement. For now, most of the U.S. legacy
carriers, including American Airlines, have been
fairly silent on how they plan to position themselves
to take advantage of these new market opportunities.
Clearly, from a geographical strategic and financial
standpoint, all parties expect a grand war for market
share at London Heathrow.
The question now becomes, “What’s next?” or “How
does this indicate that we are on the cusp of global
deregulation?” Significantly, we should read the
20
following from the preamble of the aviation agreement:
“Desiring to promote an international aviation system based
on competition among airlines in the marketplace with
minimum government interference and regulation;
“Desiring to facilitate the expansion of international air
transport opportunities, including through the development of
air transportation networks to meet the needs of passengers
and shippers for convenient air transportation services;
“Desiring to make it possible for airlines to offer the traveling
and shipping public competitive prices and services in open
markets;”
and
“Intending to establish a precedent of global significance
to promote the benefits of liberalization in this crucial
economic sector....”
The importance of these words in the preamble is
first and foremost, its display of “globalization is good”
ideology by critical elements within the governments
on both sides of the Atlantic. The second and very
telling indicator of which way the signposts point for
the future is found in Article 21 of the agreement:
Article 21 — Second Stage Negotiations
1. The Parties share the goal of continuing to open access
to markets and to maximize benefits for consumers,
airlines, labor, and communities on both sides of the
Atlantic, including the facilitation of investment so as
to better reflect the realities of a global aviation industry,
the strengthening of the transatlantic air transportation
system, and the establishment of a framework that will
encourage other countries to open their own air services
markets. The Parties shall begin negotiations not later
than 60 days after the date of provisional application
of this Agreement, with the goal of developing the next
stage expeditiously.
2. To that end, the agenda for the second stage negotiations
shall include the following items of priority interest to
one or both Parties:
a. Further liberalization of traffic rights;
b. Additional foreign investment opportunities;
c. Effect of environmental measures and infrastructure
constraints on the exercise of traffic rights;
d. Further access to Government-financed air
transportation; and
Fall 2007
e. Provision of aircraft with crew.
3. The Parties shall review their progress towards a second
stage agreement no later than 18 months after the date
when the negotiations are due to start in accordance
with paragraph 1. If no second stage agreement has
been reached by the Parties within twelve months of
the start of the review, each Party reserves the right
thereafter to suspend rights specified in this Agreement.
Such suspension shall take effect no sooner than the
start of the International Air Transport Association
(IATA) traffic season that commences no less than
twelve months after the date on which notice of
suspension is given.
A second phase of negotiations is mandated by the
agreement, and if dissatisfaction with the negotiations
is felt by either party, the offended party has the right
to suspend the existing air transport agreement and all
the new market opportunities with it. It is the ultimate
“pick up the football and go home.” Reread Article
21 to see specifically what is being negotiated for in
phase 2, and it becomes apparent that the goal is
eventually a free market environment for commercial
air transportation the world over.
The APA Board of Directors and National Officers
are keenly aware of the significant impact globalization
may have on our careers, and they support APA’s
continued involvement in the process as a member
of the U.S. State Department negotiating delegation.
It is important to know that for the time being,
our capacity to do an apples-to-apples trans-national
contract comparison is limited. However, the bottom
line is that our skills as matured crews of airline
category equipment have great value in the international marketplace. Competition for these crews has
led to a bit of a “bidding war” by overseas airlines for
those pilots willing to accept the associated risks of
changing employers. This has in effect set a floor on
wide-body flight crew labor costs above our current
pay rates. This international “free agency” has
strengthened our negotiating position.
CA Robert Coffman is a
Miami-based 767 pilot.
Letters to the Editor...
BENEFITS CALENDAR:
IMPORTANT BENEFIT DATES FOR APA MEMBERS
NOVEMBER – DECEMBER 2007
DATE
NOVEMBER
7
8
15
15
30
DECEMBER
13
15
31
Fall 2007
EVENT
SFO Retirement Planning Seminar
Deadline to elect $uper $aver contributions for November
Annual Notice of Non-Creditable Coverage for APA Benefit Plans mailed
Medicare Part D Open Enrollment begins
B-Plan Optional Contributions Election for 2008 must be received by Pension Administration
Deadline to elect $uper $aver contributions for December
Summary Annual Report for APA Benefit Plans mailed
Medicare Part D Open Enrollment ends
21
BENEFITS
Future Flightline editions will include a letters to the editor section. We invite you to
submit letters concerning articles you have read in this publication. Please send your
comments to f [email protected]
Flightline
BY DREW KEITH, APA DIRECTOR OF INDUSTRY ANALYSIS
Is it possible to have too much cash? This question
has begun to arise as AMR’s financial health has
improved and its cash position has increased
dramatically.
For a short, definitive answer – go home and ask
this of your spouse. After a puzzled look, the answer
will be “No way!” followed by “no, you can’t buy
________________________________________” (fill in the blank).
We all know it is possible for a company to have
too little cash – remember April 2003? Chances are
we all personally understand the concept of too little
cash – got kids? But is it possible for a company to
have too much cash? How does one know? And if so –
why does it matter, and what should the company do
if it does? By the way – this is a “high-grade” issue.
So, is AMR holding too much cash? Before we
derive an answer, let’s identify why too much cash
could be a problem.
? It could make AMR a “take-over” target. Excess
cash could be used by a corporate raider as part
of the “purchase price,” or by another company
to help fund a “merger” with AMR. If AMR were
to find itself “under-valued” in the market
(stock price relatively low due to a downturn
in the economy, for example), excess cash
combined with a reduced debt load could
make AMR very attractive.
I N D U S T R Y
A N A LY S I S
Too Much Cash?
Flightline
? Cash costs money. Most companies are net
borrowers – meaning they have more funded
debt than cash. It is rare for an operating
company to earn more on its deposits than its
cost of borrowing. Therefore, there is a net “cost”
for holding more cash than is necessary. In a
perfect world, a company will hold a minimal
amount of cash and pay down debt with any
excess cash (or reinvest the excess cash in the
business). Suppose AMR is holding an excess of
$1 billion and earns about 3.0% less on the
deposits than it pays on its debt – holding that
extra $1 billion costs $30 million per year (i.e.,
earning 5.0% on deposits and paying 8.0% on
borrowed funds).
? Everyone wants it. More specifically, stockholders
tend to look at excess cash as an underperforming
asset; therefore, the message to management
22
is either re-invest it in the business and grow
profitably, or “return” it to the stockholders
and they will take care of it for you. This is why
you see special dividends and stock buy-back
programs implemented from time to time.
In order to answer the subject question, we must
first answer a more fundamental question – namely
“how much cash should AMR hold?” That depends
upon a number of factors, can become very complex
(we will stick to the basics), and changes as the
environment in which the company operates
changes (which can be quite rapid). Thus, the correct
answer in terms of an amount of dollars is unique to
a specific point in time.
Let’s examine some basics used in the determination
of how much cash should be held (or more precisely,
how much cash liquidity to have available), keeping in
mind that there is a substantial degree of subjectivity
inherent in this analysis:
1. What are the structural and operating cash needs
over the near term (current liabilities; scheduled
payments within the next year or so), taking into
consideration...
2. Seasonal needs (peak periods of operations without
off-setting short-term liabilities like advance sales),
balanced against...
3. The ability to generate cash from operations net of
structural payments (keep in mind this is NOT
profits), adjusted for any...
4. Required and/or unusual cash outlays (capital
investments or potential required liability reductions),
to further include a...
5. Cash cushion, or margin of safety.
A quick word regarding liquidity: cash is king, but
holding cash has a cost. In order to better manage costs
and maintain access to adequate funds, most companies
maintain a line of credit. Lenders charge fees for the
commitment to make the funds available, but that fee
cost is much less than the net cost of borrowing. In the
case of AMR, it has traditionally maintained a line of
credit, which had been reduced and fully drawn since
2001. However, AMR’s line of credit was just recently
paid down and is currently fully available. Therefore,
in addition to the unrestricted (continued on page 25)
Fall 2007
Logbook – No open items?
Yes, we qualify.
YES
Revised 8/07
Ramp/Ground
Control
Crew
Airplane
YES
2
Yes, we qualify.
Does ramp traffic or radio congestion prevent
immediate pushback clearance?
YES
NO
NO
NO
NO
No, we do not qualify.
Is the ground crew ready for brake release and pushback?
YES
Have all checks been completed for aircraft pushback?
YES
Are all doors closed including cargo and fwd entry door?
YES
Are all bags, cargo and fuel on board?
NO
NO
NO
No, we do not qualify.
Are all crew members legal to fly scheduled segment?
YES
YES
Has the aircraft been on the ground long
enough to reasonably turn baggage and Pax?
(23-30 minutes is usually acceptable)
RFD Scenario 2 – RAMP DELAY (Misc-59)
Crew
Airplane
Barring the delay, would the aircraft normally have been ready for departure?
Pax/Crew/Fuel or Bags do not have to be on board.
RFD Scenario 1 – ATC DELAY (Misc-2)
YES
Minimum rest
requirement is
12 hours.
Supp.1 Sec7.D3
END
END
6
Revised 8/07
END
Minimum rest
requirement is twice
Minimum rest
the scheduled or actual
requirement is 16 hours.
flying time (whichever
Supp.1 Sec7.D2
is greater).
In actual operations,
Supp.1 Sec7.D2
this may be reduced
In actual operations, this
by up to 2 hours,
may be reduced by up to
provided that doing so
2 hours, provided that
does not reduce the
doing so does not reduce
rest below 12 hours.
the rest below 12 hours.
Supp.1 Sec7.D.4
Supp.1 Sec7.D.4
NO
NO
Greater than 8:00
Will your next
duty time consist
of anything
OTHER than
deadheading?
6:00-8:00
* Three-pilot crews are also required to be off-duty for at least 24 hours in any seven calendar days.
END
END
YES
Minimum rest
requirement is
12 hours.
Supp.1 Sec7.D.1 and 5
YES
YES
Will your next duty
period consist of more
than 8 hours of flying?
5:30-6:00
Minimum rest
requirement is
10 hours.
Supp.1 Sec7.D.1
NO
Will your next duty
period consist of
more than 8 hours
of flying?
NO
Are you returning
to your base?
Supp.1 Sec7.D.1
Less than 5:30
What was the greater of the scheduled or actual flying time of your last duty period?
START
THREE-PILOT CREWS
International REST REQUIREMENTS FLOW CHART
END
Minimum rest
requirement is
18 hours.
FAR 121.481c
International REST REQUIREMENTS FLOW CHART
YES
TWO-PILOT CREWS
START
Did you fly more than 8 hours in the last 24 hours?
NO
5:30-6:00
NO
Will your next duty
period consist of more
than 8 hours of flying?
YES
6:00-8:00
Greater than 8:00
Minimum rest
requirement is
18 hours.
FAR 121.481c
END
Minimum rest requirement is twice the scheduled
or actual flying time (whichever is greater).
Supp.1 Sec7.D2
In actual operations, this may be reduced
by up to 2 hours, provided that doing so
does not reduce the rest below 12 hours.
Supp.1 Sec7.D.4
YES
YES
What was the greater of the scheduled or actual flying time of your last duty period?
Less than 5:30
Are you returning
to your base?
NO
Will your next duty
period consist of
more than 8 hours
of flying?
Minimum rest
requirement is
12 hours.
Supp.1 Sec7.D.1 and 5
END
NO
Minimum rest
requirement is
10 hours.
Supp.1 Sec7.D.1
END
5
* Two-pilot crews are also required to be off-duty for at least 24 hours in any seven calendar days.
END
Revised 8/07
ATC DELAYED DEPARTURES
(RFD DELAYS)
Once again, this spring and summer have flooded us with delays, delays
and more delays. APA would like to bring to your attention a current grievance
with regard to ATC Delayed Departures (RFD Delays) and give you some
practical help should you face the same scenario.
A conflict arises between Flight Manual Part 1 and our collective bargaining
agreement when an originally scheduled departure time has been moved due
to an ATC delay. FM Part 1 states that rescheduled departures, due to ATC, do
not qualify as RFD departures. APA disagrees, believing this interpretation to
be in direct conflict with Section 15.A.12 and Supplement J of our CBA.
RFD delays are pay issues; therefore, agreed to guidance in our Green Book,
not FM Part 1, applies. Should an ATC delay be absorbed at the gate, a captain
may establish an RFD time when the aircraft and crew would have been ready
for departure. AA rescheduled departure times do not override your
right to establish an RFD time.
Supplement J covers two different types of RFD delays. We have created the
following flow charts to help you understand each of the two types of delays
and to help you determine which one you might qualify for. The first scenario
covers ATC delays, the second addresses inability to push back from a gate
due to ramp, radio or airport congestion. Please remember: there are two
different RFD delays, each associated with a different delay code in ACARS.
Also remember that ACARS units vary from aircraft to aircraft even within
the same fleet; therefore, please take time to familiarize yourself with the
appropriate codes.
This is a pay issue affecting all crewmembers. Please help us collect
data on rescheduled ATC delays. If your f light has been rescheduled
Revised 8/07
due to an ATC delay and you are ready for departure, enter the proper
RFD code and notify APA Legal if you are not credited properly.
1
cash AMR holds, it has an additional $275 million of
immediately available funds. The total of unrestricted
cash (or “available cash”) plus the immediately available funds is the available cash liquidity, and it is to
this total available cash liquidity that AMR manages.
been as low as 10.7 percent. A safe assumption
would anticipate a potential drop to 14
percent. Therefore, in terms of dollars, it makes
sense for AMR to hold about $1.3 billion of
liquidity relative to this obligation.
The chart below shows AMR’s cash liquidity over
the past decade.
b. Current maturities of debt and leases: outside of bankruptcy, given the way AMR’s debt
A brief review of five basic considerations and an
applicable amount for AMR follows:
is structured (which is similar to most major
airlines), restructuring current payments of
this debt is virtually impossible. Therefore,
most prudent companies will maintain one
year’s worth of liquidity relative to these
current maturities. In terms of dollars, this
is about $1.3 billion.
1. Near-term structural and operating cash needs:
A glance at AMR’s balance sheet reveals that it has
about $8.5 to $9.0 billion in Current Liabilities (those
obligations due within the next 12 months of the date
of the balance sheet). There are two upon which to
focus: a. Air traffic liability (advance sales of tickets –
AMR has the cash and owes the passenger the
transportation, or has awarded or sold AAdvantage
miles which will be converted to transportation),
and b. Current maturities of debt and leases. (The
remaining Current Liabilities are very stable, routine,
operations-related obligations.)
a. Air traffic liability: currently about $4.0
billion. In terms of annual passenger revenue,
this is about 20 percent – a historically high
percentage. What if an economic downturn
caused this source of cash to bleed off over a
relatively short time? How much cash could
get used delivering the transportation while
advance sales (replacement dollars) slowed?
The answer is “we really don’t know.”
However, in terms of passenger sales, this has
Fall 2007
Operating cash: AMR must have enough cash
in the bank to operate (pay the bills). AMR’s cash
operating cost per day, including fuel, is about $58
million. Of that total, the fuel portion is about $18
million. A safe assumption is to hold enough cash
for 10 days of fuel and 30 days of other operations,
for a total of $1.4 billion. (Incidentally, AMR’s credit
facility contains a covenant which requires that it
have a minimum of $1.25 billion of cash liquidity,
including amounts available on lines of credit.)
The total for this category is $4.0 billion.
2. Seasonal cash needs:
Even though AMR has flattened its flight schedule
substantially, which reduces the seasonal fluctuation
of cash, there still remain seasonal periods in which
operations consume more cash than is received.
By reviewing the peaks and (continued on next page)
25
Flightline
3. Cash generated from operations (expected) or
consumed by operations:
If AMR expects to generate cash from operations
(this is not profit, and is not simply “cash from
operations” from the Statement of Cash Flows), such
cash will reduce the amount of cash needed to be
held. Currently, analyst consensus estimates have
AMR generating profits of $740 million in 2007. By
simply adding this to known non-cash expenses, and
then deducting the known current maturities of debt
and leases, AMR is expected to generate cash of about
$550 million. (This is a traditional, overly simplistic
calculation and should not be utilized without
taking into consideration a number of other factors.
For example, cash taxes can vary considerably – in
the present case, AMR will not be paying cash taxes.
This method is used in conjunction with our
enhanced level of knowledge about AMR.)
Keep in mind that if operations are expected to
consume cash, that need must be met with retained
cash, new funded debt, or new cash equity investment
in the company, which serve to increase the amount
of available cash liquidity.
will be borrowed or provided in the form of leases)
and the support of new fleet types. Therefore, this
must be kept in mind as we review the current levels
of cash liquidity.
An industry comment: occasionally the required
equipment or regulations can change which triggers
very large capital expenditures. For example, changes to
the ATC system could require large capital expenditures
to equip and or modify existing aircraft over a relatively
short period.
Unusual cash outlays: for example, about a year
ago, before the current pension reform was passed,
AMR faced the potential for $1.3 to 1.5 billion of
required pension under-funding payments in
September 2007. With the legislation passed last year,
this obligation may now be spread out over a number
of years; however, AMR was clearly considering this
very large potential cash outlay in its cash position
analysis and planning at this time last year.
5. Cash cushion:
It has been said that “Money can’t buy love or
happiness, but it sure can soothe the nerves!” Given the
way in which we have approached this analysis, and
with no known extraordinary items pending, AMR
may currently assume it has an adequate cushion built
in. However, if threatened with a substantial economic
downturn, increased geopolitical uncertainty, a
terrorist event, or something that caused AMR to
consider the possibility of bankruptcy, a cushion for
uncertainty will certainly be included.
So, if we add this all up, we will have a reasonable
assessment of an adequate amount of available cash
liquidity to be held by AMR as of June 30, 2007. The
following table does just that, and compares it to
AMR’s actual cash position.
I N D U S T R Y
A N A LY S I S
valleys of revenue generation (which are shifted from
the cash cycles), we see that at the end of the first and
second calendar quarters, AMR should be holding
peak cash for seasonal fluctuation. Thus, analyzing
AMR’s cash balance at the end of the second calendar
quarter requires that about $600 million be included
for seasonal cash needs.
4. Required cash outlays (routine and unusual):
This area can be big, and one must know the
industry and the particular company in question in
order to be accurate. In the present case, AMR is
spending about $500 to $600 million per year simply
to maintain the current operations.
AMR Cash Analysis ($ Millions)
June 30, 2007
There will always be some level of
Cash liquidity to be held
capital investment necessary, absent a
Near term structural and operating cash required
$4,000
severely shrinking company. Currently,
Plus seasonal cash needs
600
we can expect AMR to need this amount
(Minus)/Plus cash (generated)/consumed by operations
(550)
of cash reinvested in order to maintain
Plus required cash outlays
500
its operations, even though operations
Plus
a
cash
cushion,
as
necessary
0
have continued to shrink slightly over
Reasonable (desired) level of cash liquidity:
$4,550
the past few years. Therefore, we must
include about $500 million for capital AMR current actual cash liquidity
expenditures to sustain the operations.
Cash
215
We all know that AMR needs to
Plus Short-term investments
6,155
reverse the trend of late (shrinking),
Less restricted cash and short-term investments
(470)
and will at the very least begin replacing
Plus immediately available funds
275
aircraft more rapidly within the next few
Actual cash liquidity:
$6,175
years. This will require more cash for
$1,625
both aircraft acquisition (net of what Excess cash liquidity/(liquidity deficit to desired level)
Flightline
26
Fall 2007
Therefore, a reasonable case can be made that
AMR is currently holding about $1.6 billion of
excess cash liquidity as of June 30, 2007. This is
obviously a much better position in which to be than
AMR was in 2003 through most of 2005, and you
should take comfort in this knowledge.
So – is this too much cash? My answer is “No,
not right now.” By that I mean that AMR should
hold onto the “excess” cash at this time, or continue
to reduce debt to the extent possible. (Given AMR’s
stated intention to continue to “repair” its balance
sheet, don’t be surprised if you see additional debt
reductions of $500 million or more within the next
several months.)*
AMR still has a relatively high amount of debt and
other obligations, which serve to mitigate some of
the take-over risks, but make holding some extra
cash advisable. The volatility of fuel costs also
suggests holding extra cash is prudent. Plus, with all
the labor contracts either open and/or amendable
within the next year, AMR will likely need extra cash
to accomplish new labor contracts. Furthermore, while
we may not like the possibility, AMR may be under
pressure from stockholders to consider acquisitions
or new global alliances, which makes having excess
cash relative to current needs necessary. Nor can we
forget the need for flexibility relative to re-fleeting –
excess cash provides financing options, not to mention
never wanting to face a “cash crunch” like 2003 again.
Finally, don’t take this assessment of the reasonable
level of cash liquidity as “gospel.” A present case
could be made that operating at a level of about $3.5
to $4.0 billion in cash liquidity is quite adequate, so
don’t allow some downward fluctuation alone to be
cause for concern. A determination of a safe level of
cash liquidity always depends upon a number of
ever-changing factors, many of which are subjective,
but you can rest assured that AMR currently enjoys
a very strong cash liquidity position!
*Editor’s note: Great prediction by Drew. AMR announced
a $545 million early debt retirement in September.
Your Investment in AMR
The totals shown to the right are the “investment” you will have made in AMR since May 2003 through May 2008.
The totals below are based on 12-year pay and a 78-hour month. They represent the cumulative differences in your pay
between your “pre-May 2003” hourly rate and each subsequent year through May 2008. As you will see, by May 2008, you
will have “invested” more than one year of gross income.
Equipment
and Seat
S80 CA
Gross Income
Loss
$93,903
P-Plan
Loss
$ 10,329
Your Investment
in AMR
$104,232
737 FO
$ 96,414
$16,327
$112,741
$164,766
757 FO
$100,907
$11,099
$112,006
$16,828
$169,822
767 FO
$104,053
$11,144
$115,497
$154,358
$16,979
$171,338
A300 FO
$105,453
$11,600
$ 117,053
$171, 711
$18,886
$190,597
777 FO
$116,752
$12,839
$129,591
Gross Income
Loss
$138,103
P-Plan
Loss
$15,190
Your Investment
in AMR
$153,293
737 CA
$141,785
$15,596
$157,382
757 CA
$148,439
$16,327
767 CA
$152,994
A300 CA
777 CA
Equipment
and Seat
S80 FO
*The “pre-May 2003” hourly rate was actually from our August 2000 pay tables. This was the last hourly pay rate you received before the May 2003 contract
* These totals do not include the value of additional “investments” such as: changes in vacation and sick benefits, displacements, “falling back to reserve,”
effect on the A-Plan (final average earnings), B-Plan compounding, inflation, etc. Therefore, in most cases this may be your minimum investment.
— FO Dennis Tajer, ORD S-80
Fall 2007
27
Flightline
BY CAPTAIN DENNY BRESLIN, COMMITTEE FOR ARMED DEFENSE OF THE COCKPIT
C A D C
C O M M I T T E E
CADC – Working for Program
Improvements
APA CADC was first to call for the arming of pilots
after 9/11, and was quickly joined by other organizations
within the Coalition of Airline Pilots Associations
(CAPA), the Air Line Pilots Association (ALPA), and
pilots from the Airline Pilots Security Alliance. As a
result, the Arming Pilots Against
Terrorism Act of 2002 (APATA)
established the Federal Flight
Deck Officer Program. Optimism
reigned in April 2003 when the
first pilots were armed, because
cockpits were protected from
hostile takeover. However, the
excitement of having conquered a
legislative mountain was tempered
with the knowledge that the program was flawed.
Improvements would be necessary if pilots were to
embrace the program.
At the outset, the most glaring flaws related to
transporting and carrying the weapon, and procedural improvements were made soon after initial
deployment of armed pilots. But additional changes
were needed to attract and retain qualified FFDOs.
Among the top reasons pilots gave for declining to
volunteer for FFDO training were the weapons
transport policies and the cost of participating.
Despite language in the law that clearly stipulates
training and equipment would be provided “at no
expense to the pilot” – the reality proved otherwise.
Time off for training is still a major deterrent to
participation, as is the cumbersome application
process. Issues with holsters and badges, too few
recurrent and re-qualification training sites, personal
liability exposure, and the out-of-pocket expenses
connected with training continue to be challenges faced
by FFDOs. While the FFDO program has experienced
some improvements after administratively moving
under the Federal Air Marshal Service nearly two years
ago, improvements of any lasting or significant nature
must come through legislation. It is commonly
understood that executive branch action comes only
with leverage provided by pending legislation.
Therefore, APA’s CADC has worked tirelessly to
initiate legislation to fix the flaws in this otherwise
Flightline
28
excellent program.
FFDOs were thrilled when locking holsters
replaced the cumbersome lockboxes this summer,
and in the near future, badges will be issued to
accompany new federal LEO (law enforcement officer)
credentials. While the importance of
having badges may not be readily
apparent, the issuance of a badge
is necessary for the safety of the
FFDO in quickly identifying himself as a LEO in the presence of
other badged LEOs. Additionally,
it provides a way to validate the
FFDO credential to law enforcement
agencies unfamiliar with the program.
Why worry about this stuff? While many thousands
of pilots have been deputized over the past four
years, there still is some attrition because of the
flaws mentioned earlier. Thus, there are cockpits
unprotected by either a FAM or FFDO. This is
definitely a case where more is better.
Your CADC, in partnership with representatives
from APA Security, have been working with Congress
to pass legislation that will fix shortcomings of the
program and inspire more pilots to volunteer to
become FFDOs. The numbers of deputized pilots is
confidential, but it is less than the 50-60 percent
target contemplated when Congress passed APATA in
2002. CADC’s current legislative efforts to enhance
the program are focused on relieving the economic
burdens on pilots, expanding coverage to international destinations and easing restrictions on FFDOs
while riding in the cabin.
Recently, CADC Chairman First Officer Mike Karn
met with FAMS leadership and Transportation
Security Administration general counsel to discuss the
following issues that will be the essential elements of
proposed legislation:
• Timeline for distribution of badges and new
credentials
• Location of recurrent training sites
n
FFDO deputation is limited to five years.
Many FFDOs are coming up for recertification
Fall 2007
of their federal LEO deputation. A two-day
mandatory recurrent training class is required
to renew that deputation. Priority will be
given to expanding the number of training
sites across the country to make it easier to
commute to that training.
n
FAMS headquarters staff members are
currently evaluating numerous recurrent
training locations, but have not yet decided
which ones will be chosen. Feedback from
FFDOs helps refine the choices ultimately
made.
• Due process policy for FFDOs involved in
disciplinary investigations
n
Authorization to carry a weapon and use
deadly force in extreme situations comes
with additional responsibility. FFDOs who
allegedly violate their strict SOP, either
intentionally or inadvertently, are subject to
investigation. Therefore, when issues arise, we
must make sure FFDOs are protected by due
process and have access to legal representation
in official investigations. FFDOs are voluntary
federal officers. That status is rather unique
in law enforcement, so every precaution
should be made to protect the individual
rights of the FFDO.
• International carriage
n
There have been rumors that in some cases,
international carriage has been agreed upon
in principle, contingent upon agreements
with foreign governments for weapons
custody in the host country.
n
This has been a priority with CADC since day
one, and continues to be a constant source
of frustration. No U.S.-originated legislation
can compel a foreign country to allow pilots
to fly into their country armed. However,
using weapons handling protocols similar
to those used by the FAMs may be the key to
finalizing FFDO international agreements.
• The high cost in time and money to attend
initial training (one week) and re-qualification
every six months is a financial burden pilots will
tolerate for only so long. It is time to get this fixed.
One of the possible ways of compensating pilots
for time and expenses may be a federal tax credit.
Other CADC activities
• FFDOA – Federal Flight Deck Officers Association
Fall 2007
– FFDOs have formed a protective association
to deal specifically with the needs of FFDOs.
FFDOA is an organization founded and funded
by FFDOs providing program support, insurance,
liability protection and a common communication thread between FFDOs from different
airlines. FFDOs are encouraged to join FFDOA
at www.ffdoa.org.
• CADC Forum – FFDOs can access a secure Web
site to communicate among themselves, read
the latest information about the program, and
read about pending changes and legislation. It
is similar to Challenge & Response, but is limited
to FFDO issues. All APA FFDOs may have access,
and are encouraged to participate in the online
discussions.
• CADC Standards – While many FFDOs at
American are aware of the CADC standardization
program, the vast majority of our pilots may be
surprised to learn that the FFDO program has its
own standardization program. This program is
similar in some ways to Professional Standards,
but is quite different in other ways. The CADC
Standards officer is a volunteer who uses
established local programs to help FFDOs in the
performance of their mission. If a crew member
has questions or concerns about the FFDO
program or its participants, they are directed to
a local or national Standards representative.
However, unlike our regular Professional
Standards program, FFDOs are not permitted
to guarantee the confidentiality of the subject
FFDO should an incident occur. The members
of FFDO Standards (or CADC Standards, as it is
usually known) stand ready to serve our country
in helping the FFDO program run at its best.
Legislation
APA’s CADC has been working closely with members
of the Federal Flight Deck Officers Association, ALPA
and CAPA to find sponsors for legislation that Sen.
Jim Bunning (R-Ky.) has offered to initiate. Recently,
we met with five different Senate offices. The road to
effective change through administrative governmental
bureaucracy has been painfully slow, and legislation
has been difficult to get passed. Nonetheless, “pending”
legislation makes it much easier to get administrative
changes made.
In August, we had several meetings with several key
legislators who expressed a desire to make corrections
to the FFDO program. (continued on next page)
29
Flightline
We anticipate action to occur very early in the fall. When
we have legislation that is ready to be introduced,
CADC will be asking for your help in calling and faxing
your legislators. Please stay tuned for further developments and be willing to participate in legislative
alerts to key legislators if it becomes necessary.
Meanwhile, CADC encourages all pilots to volunteer
for the FFDO program by visiting the program’s Web
site: www.tsa.gov/lawenforcement/programs/ffdo.shtm
CA Denny Breslin is
a Los Angeles-based
international 777 pilot.
WE ARE WORTH IT:
Two AA Pilots Honored for
Their Superior Airmanship
It was Feb. 18, 2003, and Captain Terry Lewis and First Officer
Bill Harben were at the controls of an S80 traveling from West Palm
Beach, Fla. to Dallas-Fort Worth.
During a turn over the inbound cornerpost, the autopilot tripped
off and Captain Lewis took control. When he found the ailerons
jammed, he asked FO Harben to help him right the aircraft.
“Both Terry and I thought this was it,” FO Harben said. “We
didn’t know if we were going to land safely.”
Here, in FO Harben’s own words (reprinted from a 2005 Flightline
article), is a description of what happened:
“Between the two of us, with knees wedged between the floor and the
yoke, we were barely able to overpower the bind and roll out. However, the malfunction persisted and we were unable to
steer. Looking through the ops manual and calling maintenance offered no solutions. Now, 50 miles north of the field,
we could only try to turn back, as we did not have enough fuel to land at a field to the north. So, with an all-out effort,
we got the ship into eight degrees of left bank.”
On the dog-leg to final, Captain Lewis and FO Harben had only one more turn to make to line up with the
runway. With both of them pushing on the control wheels, the jam abruptly disengaged and caused them to
enter an unusual attitude due to the force they exerted on the yoke.
“Once recovered, we both felt the emergency was over since the plane appeared to fly. However, as the captain tried
to fly, he asked me to try my side. I soon realized that I had no aileron authority at all, just a sloppy wheel. Although
the yoke moved freely, the plane didn’t. The captain had what appeared to be partial aileron authority. He quickly
relearned how to fly this broken bird and landed safely,” FO Harben wrote.
At the San Francisco 2007 Retirement Dinner earlier this year, Captain Lewis (who is now retired) and FO
Harben received the long overdue Spirit of American award for the superior airmanship they displayed during
that fateful flight in 2003.
The award’s inscription reads: “In recognition of your outstanding contribution to the American Airlines
Flight Department.” An understatement, for sure.
Flightline
30
Fall 2007
Last fall, with rumors of recall in the air, I began to
prepare for the expected phone call, the one during
which I would decide whether to defer or return. I
could not help but think how sad it was that I would
even contemplate the issue. Just a few years prior, I ran
from my mailbox, elated by the arrival of my invitation
to interview with American Airlines and shortly thereafter, cheerfully prepared for my new career.
On March 13, 2000, 40 new hire pilots, accompanied
by their spouses, parents or significant others spilled
into the G-Auditorium
at the Flight Academy.
The air was static with
excitement. Continuous
reminders spoke we were
now part of the family.
The family described as
“Something Special in
the Air.” Videos streamed
on and on of sleek silver
airplanes soaring above
the grandeur of the land highlighting employees
whose service made you proud — proud to be
American and an American Airlines employee. With
each video and each presentation, American Airlines
not only warmly welcomed us, but also spurred in us
a sense of commitment, enthusiasm and loyalty. The
future was bright and full of prospect. As we filled
out our forms, we looked forward to the longevity of
our careers and after a job well done, retirement.
Almost exactly seven years later, March 7, 2007 to
be exact, I as well as many of my fellow furloughees
trepidaciously accepted a class date for return. Several
years prior to our release, we rode the rollercoaster
between being safe from furlough to seeing our
names on the list. The effect “MOAB the Great” had
on almost all of us included displacement from our
bases; many of those also forced off their current
equipment. Ultimately, MOAB and pay cuts affected
the pilot group in its entirety. Speaking solely for
myself, the stress of commuting to international
reserve, insecurity in the workplace with the word
furlough written on the wall finally got the best of
my attitude and me. By the time we left, I think most
of us were ready.
Sue Kaolosa was tasked with the responsibility of
calling each of us to offer us the chance to return. She
was terrific when it came to answering questions and
accepting our unsolicited phone calls. About two
weeks prior to return, we all received another phone
call with a slew of possible base and equipment
assignments. If I remember correctly, we were given
LGA-A300 I, LGA-S80, BOS-S80, ORD-S80, SLT-S80
and MIA-737 and asked to preferentially list them.
Director of Flight Administration Scott Hansen
and his crew greeted us on our first day back. They
Remember our slogan that they
played over and over in new hire school
“Something Special in the Air”? Plenty
of time has passed since I felt like that. Nowadays,
my slogan sounds more like “Something
Fall 2007
Exhausted in the Air.”
provided a continental breakfast, friendly faces and
a wealth of information to help us forge our way
through the mound of paperwork demanding
attention. Scott spent the entire day with us. Not
only did he chat with us during the breaks, but he
also tried to listen empathetically as we voiced our
concern about some of the content presented.
Our first day back was perhaps a bit less than
pleasant. First on the agenda we had the opportunity
to meet our new Director of Technical Operations Bob
Reding. The first half of his dissertation consisted of
an in-depth verbal resume. Immediately following
was a very small focus on the current state of the
airline and our ability to navigate effectively into the
position of becoming the only major air carrier able
to avoid bankruptcy.
“We are doing well,” he said, but he told us to
remember that we weren’t out of the woods yet, that
they still needed our help, our effort, and our guts to
continue our success. Great, we all sighed, perhaps
there really is hope, and we really do have a future here
at American. Unfortunately, Mr. Reding no more than
finished his sentence with regard to our financial
health and it appeared on the huge white screen
directly in front of us: PUP! (continued on next page)
31
C O M M I T T E E
BY FIRST OFFICER CYNDI DAWSON, COMMUNICATIONS COMMITTEE
C O M M.
Recall and Nostalgia
Flightline
C O M M I T T E E
C O M M.
Flightline
His visit ended in a small question-and-answer
session with most of our questions left unanswerable
including the retirement of old and addition of
new aircraft.
Next was a visit from Captain Mark Hettermann.
Unfortunately, I do not remember much about his
visit. He read from a script, showed us a slightly
different version of the PUP slides, highlighted some
new policy about sick calls, and I think somewhere in
there welcomed us back. Most of us had lost interest
in what he had to say when he started down the same
road with PUP that Mr. Reding had already tread.
After listening to both guests, it became very apparent
our company’s labor diplomacy focused heavily on the
justification of executive pay. Based off its apparent
importance, management’s belief with regard to the
enormous disparity between the employee groups
and our leadership must lie directly in the lack of its
workforce’s understanding as to how and why their
pay rates are legitimate. Remember, we swallowed
this on the heels of “Gentlemen and Lady, welcome
back! We know pilots have great work ethics, keep
your heads down and your hands to the grind. Oh
yeah, and if you have more than three sick occurrences
make sure your phone is on because an already task
saturated Chief will now have to call you.” I guess I
was a little offended that neither speaker bothered to
thank us for helping them become multi-millionaires.
Our ultimate sacrifices were not even mentioned.
I guess our reward was just to have our jobs back.
Surprisingly enough, we didn’t make it through our
first day back without the rumor of another 1,000
furloughs.
Somewhere between each of our two visits, Scott
Hansen laid out all of the possible base and equipment
assignments on the white board. One by one, we went
through the list. Any person holding a reinstatement
right and able to hold that position could opt to
exercise that right. Shortly thereafter, we received our
training schedule which typically started either the
next day or within that week. Our furlough class was
on the edge of the two-year training equipment rule.
If the pilot had not been off the equipment for more
than two years, they entered a condensed training
program. Most of these courses lasted about seven
days. Coming off the 75/767, I was assigned ORD S-80
and put into the full program. My first month back
on the line, I ended at my monthly max; juniormanned on the majority of my assignments.
Remember our slogan that they played over and
over in new hire school, “Something Special in the
Air”? Plenty of time has passed since I last felt like that.
Nowadays, my slogan sounds more like “Something
Exhausted in the Air.” Just about the only similarities
between my current return and my initial hiring were
the familiar faces of my fellow classmates and the
parade over to the C.R. Smith Museum for pictures.
When you head back for recurrent, you can see each
group of pictures posted right by the stairs.
Ahh, the voice of nostalgia…a bittersweet longing
for things, people or situations past.
On a brighter note, despite my earlier comments,
I am happy to be back. I do enjoy my job and I have a
sense of satisfaction when I know I have done a good
job and contributed. The best part is reacquainting
with all of my friends and fellow employees. The day
my name first appeared on the recall list with a class
date posted next to it, the e-mails and phone calls
rolled in. It was so nice to hear from all of you who
were looking forward to the return of furloughees
like myself.
On behalf of my fellow classmates, I have to say a
huge thank you to Membership/Furlough Committee
Chairman Captain Rusty McDaniels and his group
for all of the tireless help they gave and continue to
give. Rusty, you have been a solid rock in a tumultuous
sea! Not only was Rusty available via phone and
e-mail, but he and APA provided us a great “welcome
back” dinner on the evening prior to our first day
back.
FO Cyndi Dawson is a
Chicago-based S80 pilot.
If you have any questions about furlough please visit the APA Web site at
www.alliedpilots.org/Members/Committees/membership/furlough/index.asp
32
Fall 2007
January 31, 2007
Allen Bigelow
Brian Doering
David Fawcett
Christopher Krull
David Lemke
Vladimir Migic
Michael Rader
Philip Smith
Frank Wells Jr.
March 7, 2007
William Armour Jr.
Carlos Artecona
Robert Ashby
Judson Birza
Bob Brew
Evan Charles
Cynthia Dawson
John Defranco
Matt Etzelmiller
Bradley Fritcher
Todd High
Stephen James
Curtis Mamzic
Steve McKelvey
Mark Morgan
David O’Donnell
Frank Petrone III
Gary Scroggins
Todd Williams
William Wilson Jr.
May 2, 2007
Bryan Ambrose
James Angelici
Wayne Bradshaw
Randy Caldiero
Russell Clark
Randolph Clinton
Fredrick Colchin
John Connors
Robert Cornelius
William Dismukes
Douglas English
John Faber
Craig Field
Patrick Gordon
Matthew Keen
Daniel Ledford
Terrance Lyon
Mark Miller
Brian Montgomery
Sean Neilon
Sammy Odeh
James Phillips
Todd Robinson
Terence Small
Brian Smith
James Stephens
N. Chip Stiver
J. Michael Thomas
Daniel Tolly
Barbara Tuider
Blake Zandbergen
April 4, 2007
Segundo Andrew
John Behymer
Darren Buck
Richard Butler
Ronald Carder
Brent Conway
Marc Fischman
Robert Gahs
James Goritsan
Martyn Harris
Daniel Henderson
James Henderson
Thomas Horvath
William Kiraly
Eric Kos
Brian Lichtwardt
Gregory Mason
Garfield McFarlane
June 6, 2007
Danny Acock
Robert Aycoth
William Bearchell
Carlos Concepcion
Michael Cornelius
Michael Davis
John Ebeling
Joseph Emerson
Michael Faller
Mark Goede
Russell Grotrian
Robert Hogan
Marjory Horne
Lloyd Humphrey
Steven Kuehn
Hector Martinez
James Mast
Timothy McCann
Fall 2007
Kurt Oestreicher
Paul Pruitt
Mark Reus
Laurie Ritschl
Kirk Sanchez
Adam Schendel
Jim Schneider
Robert Stewart
Steven Stricklin
David Supple
Fred Toleman
Tim Wagner
Dennis Weaver
July 3, 2007
DeAnne Ackley
Cynthia Allen
Paul Borowsky
Larry Brown
Kevin Cronk
Thomas Evans Jr.
James Edlefsen
William Faris
Joseph Ferraro
Michael Ferreira
Duane Fouts
Stephen Gardner
John Grosserode
Michael Huffman
William Kearns
Mark Killpack
Yoo Kim
Roger King
John Lange
Barry Luff
SomCha Odom
Jimmy Pace
Eric Pensky
Mark Percy
John Plummer
Steven Powers
Andrew Pratz
Michael Rhea
William Rodriguez
Louis Schmidt
Raymond Scott
Robert Smith
Chad Spilman
Jeanne Trigo
Brian Urbancsik
Michael Vick
Matthew Watson
Andrew Weingram
Michael Widdows
August 1, 2007
Michael Akin
Carrie Bean
Stephen Brooks
Bryce Burgess
Craig Burlette
Timothy Burns
Keene Cameron
Tim Carmichael
Amy Casina
Jaime Chalem
Robert Conner
Mark Cook
Edward Diehl
Kathryn Dyson
Donald Engle
Karen Gibson
Bo Hansen
Marc Hartford
Christopher Hebert
Darrell Hejde
David Hornung
Kenneth Jennings
Stephen Lacourse
Paul McFarland
James McLaughlin
Darin McMullin
Douglas Mueller
Stephen Neal
Marty Pruden
Gerald Rochez
Steven Rosborough
Anthony Schmidt
Leonard Shetler
David Smith
James Spagnolo
Patrick Timothy
Carl Ust
William Vane
Terry Vann
Andrew Weaver
Carl Wegierski
Alden Williams
Roderick Wingard
Dariusz Witkowski
Michael Young
September 5, 2007
Robert Cartwright
Daniel Cooney
Daniel Dobison
Steven Erickson
Scott Fitzgerald
Lee Fox
Joseph Grana
Albert Grubbs
Robert Haataja
William Hopmeier
William Jagust
Gordon Jesse
Christopher Johnson
Ronald Johnson Jr.
Richard Jones
Douglas Langlois
Steven Levert
Daniel Norrgran
Timothy Omara
Kevin Pentoney
David Phillips
Michael Popovich
Rex Richard
Anthony Romane
Stephen Ryan
Alberto Santiago
Loail Sims
Paul Slawson
Raymond Snouffer
Steven Sperber
John Stewart
Mario Suarez
Gregg Sullivan
Kenneth Tully
David Wright
Kevon Zehner
October 3, 2007
Malcolm Andrews
Robert Barber
Robert Bell
Scott Blake
Robert Brown
Rene Dam
Kevin Decker
John Floyd
Angel Gonzalez
Roger Grant
Dag Hanssen
Neil Harski
Kai Jackson
Jeffrey Kilgariff
Ron Kwiatt
Leslee Lenoch
John Malandro
Charles McLeod
Juan Moncaleano
Christopher Mortensen
Juan Munoz
Christopher Musgrave
Curt Peterson
Mark Placey
Gordon Sheals
Kurt Stein
Daniel Stoner
Mark Volk
Audrey Wahl
Craig Young
October 17, 2007
Charles Blake
Steven Bross
Heather Brown
Bradley Bruner
Keith Byrd
Jorge Camacho
Daniel Frerichs
Steven Gauvain
Kenneth Goldsmith
Douglas Hancock
Russell Lanker
Larry Killpack
Stephen O’Connor Jr.
Joseph Pangelinan
Jay Randall
Natalie Shriner
Morgan Tolbert
Douglas Welch
33
P I L O T S
William Morrill
Randall Narcisi
Kevin O’Neil
Scott Palmer
David Pearson
Steven Robenalt
Louise Ronnerman-McKee
Mia Shea
Robert Shimp Jr.
Raymond Stettner
Ronald Toth
William Treptow
R E C A L L E D
January 3, 2007
Douglas Geddes
Carrie Giles
Michael Henry
John Hine
Mark Joines
Kevin Ketterman
Darrell Richardson
Deborah Schultz
Alicia Sikes
Dennis Thornton
Don Walker II
Flightline
IN MEMORY
We honor the following AA pilots and extend
deepest sympathies to their loved ones.
Retired CA Norman Flanagan
Retired CA Malcolm Shepley
Retired CA Karl Oviatt
Retired CA Robert Wood
Retired CA Arnold Boedigheimer
Retired CA Roy Ricks
Retired CA Norman Keadle
Retired CA Don Hansen
Retired CA Leonard Adair
Retired CA Raymond Plunkett
Retired CA Wallace Gillman
Retired CA Bruce Briggs
Retired CA Charles Frisk
Retired CA Ulys Ridenour
Retired CA Russell Quandt
Retired CA Douglas Race
Retired CA Louis Yager
Retired CA Patrick Sweeney
Retired CA William Little
Retired CA Jack Hall
Retired CA Augustus Knowles
CA Scott W. Hayes
Retired CA Kenneth Baker
Retired CA Don Holson
Retired CA Robert Powers
Retired CA Donald McIntyre
FO William Felt
Retired CA David Miller
FO Curtis Campbell
Retired CA Mark Vollmer
Retired CA Bart Ale
Retired CA John Williams
Retired CA James Donohoe
Retired CA James Wakefield
Retired CA William Davenport
Retired CA Mark McNulty
Retired CA Frederick Young
Retired CA J.R. (Dick) Lyons
Retired CA Eric Crayon
Retired CA Louis Harvill
Retired CA W.E. (Bill) Oberholtzer
Retired CA Albert Cusanelli
Retired CA Warren Hail
Retired CA Rand McNally
Retired CA Henry Malin
Retired CA James Baum
Retired CA Edwin Preston
Retired CA Clifford Richard
Retired CA Cary Carson
FO Charles Peavler
Retired CA Edmund Belton
Retired CA James Howard
Retired CA Henry Furtwangler
Retired CA Donald Miller
Flightline
38
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Fall 2007
ALLIED PILOTS ASSOCIATION
O’Connell Building
14600 Trinity Boulevard, Suite 500
Fort Worth, TX 76155-2512
817.302.2272
ADDRESS SERVICE REQUESTED
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Arlington, TX
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