Print

America West Merger Committee Update January 28, 2015

on .

We have been busy at work on your behalf over the past three weeks since the Preliminary Arbitration Award, and would like to update you about a few items.

 

WEST MERGER COMMITTEE CHAIRMAN

 

We are pleased to announce that we have officially appointed Captain Russ Payne as Chairman of the West Merger Committee. As most of you know, Russ served on the America West Merger Committee under ALPA during the America West / US Airways merger, and was a key participant throughout the Nicolau arbitration process and subsequent litigation. Given Russ' experience with seniority integration matters and his time-tested working relationship with our legal team, we believe Russ is the most logical choice to serve in this role.

 

THE NICOLAU AWARD

 

Many of you rightfully are bit fuzzy as to the status of the Nicolau Award after the latest iteration of court battles and arbitrations, and have asked us to explain how the Nicolau Award might become part of the new American Airlines seniority list.

 

 

During the SLI process ahead of us, each of the three merger committees (AA, East, and West) will likely present different ideas of how the final American Airlines seniority list should be integrated. Ultimately, it will be up to a panel of three highly-seasoned arbitrators to determine which portion(s) (if any) of each proposal meet the fair and equitable standard as they attempt to craft their award. An important part of this process will be determining the relative ordering of East and West pilots into that final American Airlines seniority list, and of course, it is for that reason APA established (and American supported) separate East and West committees for this process. Both the East and West committees will present their views as to the relative ordering of the East and West pilots, and it will be up to the arbitration panel to decide how that should be done.

 

Our position is simple. The pre-merger stand-alone career expectations of America West and US Airways pilots were set and measured in May 2005 when the merger of those two airlines was announced. From that point on, we began working for a new airline (LCC) with new career expectations, and agreed to equitably divide the benefits of our new airline according to a well-recognized, fair and equitable seniority integration process. Both pilot groups participated in the process in good faith and without a single objection to any part of the process itself. The process ended with a result, and that result remains the ONLY combined East/West seniority list ever reached by mutual East/West agreement, and it is the ONLY combined East/West seniority list ever accepted by US Airways. That seniority list, the Nicolau Award, can therefore be the ONLY fair and equitable basis for integrating US Airways pilots with American Airlines pilots. The fact that it was never implemented is of no moment; it reflected the balancing of pre-merger stand-alone career expectations of the two pilot groups then and it still does today.

 

On the other hand, the USAPA approach, in a nutshell, was best characterized by Arbitrator Javits during the Preliminary Arbitration when he asked this of USAPA Merger Committee Chairman Jess Pauley:

 

I guess the gravamen of the questions is are you then putting yourself in the place of Nicolau, are you the new Nicolau because you are proposing a list which may not reflect Nicolau's list?

 

As much as many of us might think the Nicolau Award is unfair to West pilots or that it does not properly compensate us for the past several years of undue hardship, we have always held fast to that result because it is the most reasonable, supportable, and just position. We have always believed that it would be very difficult to convince a federal judge or subsequent arbitration panel that we are entitled to MORE than Mr. Nicolau awarded us, or that we are better situated to determine a fair and equitable integration of East and West pilots than a neutral arbitrator. In short, it is our job to propose a fair and equitable solution, and as Judge Silver stated, [a]n impartial arbitrator's decision regarding an appropriate method of seniority integration is powerful evidence of a fair result.

 

Having explained the above, we would like to reaffirm these words from our previous update:

 

[I]t is now more important than ever that we put aside all of this unpleasant history, but still learn and apply its lessons. Perhaps the largest lesson of the past several years is that the seniority integration MUST be resolved in the agreed-to process, and cannot and will not be resolved in cockpits and crew rooms. And although we have to expect that each committee will have widely disparate views about how our respective seniority lists should be integrated, those views should begin and end within that process. There WILL be an integrated airline at the end of this process this time, we will be sharing cockpits with our counterparts, and none of us wants to come to work in a divided, hostile work environment.

 

SENIORITY INTEGRATION ARBITRATION DATES

 

The attorneys have been working behind the scenes with one another and with the arbitration panel to establish hearing dates and hearing protocols.

The Protocol Agreement provides, [t]he arbitration hearing will be limited to 12 hearing days; provided, that with the concurrence of the Merger Committees and American, or at the request of the Arbitration Board, the hearing may be extended up to an additional four days.

 

Hearing dates have been set for June 29-July 2 and July 13-16, and scattered throughout much of this summer. The additional 8 hearing dates will likely be scheduled for early to mid-fall. There is a lawyers' only procedural conference in Washington, DC on March 6 where this and other matters will be discussed and resolved. The hearings will most likely take place in Washington DC, and will likely be open to all pilots to attend. We will publish more details once finalized.

 

MERGER COMMITTEE FUNDING

 

Although the privilege of having our own merger committee has created some newfound optimism for many of us, there is still a very long way to go until we reach a final integrated seniority list, and reaching that goal will not be inexpensive. The cost of putting together an integrated seniority list includes attorneys fees, expert witness / consultant fees, and flight pay loss and expenses for committee members. To give you an idea of the potential expense involved, the other merger committees have each budgeted $3-4 million for this process.

 

The West Merger Committee has three current / potential sources of income:

 

1. Leonidas LLC.

 

Your contributions to Leonidas LLC are the most reliable and accessible form of funding, and therefore the most crucial at this early stage. We strongly encourage all pilots to sign up for a Push For Justice commitment at the following link: www.thepushforjustice.com

Sufficient participation in the Push For Justice program will adequately cover the cost of seniority integration.

 

2. American Airlines.

 

The MOU and Protocol Agreement provide that each merger committee will receive one-third of a $4m reimbursement from the company ($1.33m for West pilots) if we are able to complete an integrated seniority list by December 9, 2015. APA has agreed to essentially advance each of the committees their share of these funds by means of allowing us to submit certain expenses to APA for payment. Payment of those expenses will be deducted from the $1.33m reimbursement that each committee is expected to receive. It is not clear what will happen if we cannot meet our December 9, 2015 deadline, although the company has unofficially indicated that the deadline would remain flexible so long as the parties continue to work in good faith to meet it.

 

3. USAPA.

 

Prior to APA's certification as our bargaining agent, both APA and USAPA set aside merger funds for use in seniority integration. APA properly set aside a fund for the American Airlines Pilot Seniority Integration Committee (AAPSIC) from dues money paid only by Legacy American Airlines pilots, and prior to its succession as our bargaining agent, before it owed any legal duties to US Airways pilots. USAPA ran a 0.5% merger assessment against all US Airways pilots, and that assessment paid into a merger fund containing monies from both East and West pilots. Although USAPA no longer has any authority to represent West pilots in seniority integration proceedings, it has refused to relinquish the West's share of the merger fund, and it plans to use West money to fund a merger committee that now represents only East pilots. It will therefore require successful litigation to cause USAPA to properly relinquish that money.

 

Some of you have raised questions about the ability to self-assess, and other related funding questions. We are currently doing our diligence to have those questions properly answered, to leave no stone unturned for funding sources. We will provide you with a more comprehensive update about this topic very soon.

 

We again thank you for your unwavering support, and look forward to updating you in the coming days.

 

Sincerely,

 

The West Merger Committee

 

David Braid        Mark Burman        Johan de Vicq

Eric Ferguson     Jeff O'Connell       Russ Payne

Jim Van Sickle    Mitch Vasin          Roger Velez