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America West Merger Committee Update June 26, 2015

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In this final update before the commencement of the seniority arbitration proceedings, we have three items to discuss with you.

 

PRE-HEARING BRIEFS AND SENIORITY INTEGRATION PROPOSALS

 

As you are aware, on Friday June 19, all three merger committees exchanged and submitted to the arbitration panel pre-hearing briefs, exhibits, and proposed seniority lists. The pre-hearing briefs, proposed seniority lists, and witness lists are posted at the following locations:

 

http://www.west-merger-committee.com

https://public.alliedpilots.org/apa/

Home/SeniorityIntegration.aspx

 

While we know that it is difficult to refrain from reacting to some of these proposals, it is important that we all be reminded that we are very much on familiar ground here. Each proposal will be vetted by a 3-member arbitration panel after 12-16 days of witness testimony and exhibits, and history has consistently shown that unreasonable positions rarely, if ever, survive that degree of objective scrutiny. We therefore encourage all pilots to remain engaged in the process, and refrain from allowing it to become a matter of fruitless, and potentially divisive debate with folks with whom we will be sharing cockpits in the near future. History has also shown the extraordinarily detrimental effects of allowing seniority integration to spill outside the confines of the agreed-to process.

 

OBJECTIVE OVERVIEW OF THE POSITIONS

 

We thought it might be helpful to provide you an objective summary of each committees proposal. The purpose of this summary is to provide you with a general overview of the main arguments presented by each committee, so that you have a bit more focus on the issues as you follow along the arbitration proceedings. It is not our purpose here to mischaracterize any positions, or otherwise promote or diminish any of the positions; simply to explain them as we understand them.

 

 

First, it is worth mentioning one important element of the proposals upon which all 3 committees do completely agree: timely implementation of the seniority award. Therefore, all 3 committees have proposed that the arbitration panel adopt the following language as a condition and restriction to the award:

"Effective as soon as practicable, and in no event later than the first day of the third flying month following the issuance of the award, the Company shall apply the ISL issued by the Board, including any attendant conditions and restrictions (the ISL) as the Pilot System Seniority List for all American Airlines Pilots (i.e. American Airlines and US Airways pilots) provided for by Section 13.G. of the Joint Collective Bargaining Agreement between American Airlines and the Pilots in the Service of American Airlines (JCBA) and shall apply the ISL to all events as to which system seniority is applicable under the JCBA".

Although the proposed list themselves are quite disparate, the methodologies use to derive each proposed list have a few tenets in common. A brief description of each tenet is as follows:

 

Status & Category

 

This tenet is used to create ratios based upon the number of jobs each pilot group brings to the merger. Status refers to either captain or first officer, and category refers to an equipment type or equipment grouping. Generally a status & category methodology involves creating a number of status & category "tiers", e.g. widebody captain, narrowbody captain, etc. Consider the following examples from previous arbitration awards:

 

Nicolau Award

Tier 1: A330 Captains & First Officers

Tier 2: B767/757 Captains

Tier 3: A320/B737 Captains

Tier 4: B767/757 First Officers 

Tier 5: A320/B737 First Officers 

Tier 6: Furloughees

 

Delta / Northwest 

Tier 1: Widebody Captain 

Tier 2: Narrowbody Captain

Tier 3: Widebody First Officer

Tier 4: Narrowbody First Officer

[Note: neither airline had furloughed pilots at the snapshot date]

 

United / Continental

Tier 1: 747CA, 777CA, 787CA, 350CA

Tier 2: 767/757CA

Tier 3: 321/320/319CA/737CA

Tier 4: 747FO, 777FO, 787FO, 350FO

Tier 5: 767,757FO

Tier 6: 321/320/319FO, 737FO

Tier 7: Furloughees

The parties in our case have proposed status & category tiers as follows:

 

West Committee

Tier 1: Large Widebody Captains (B777 & A330)

Tier 2: Small Widebody Captains (B767/757)

Tier 3: Narrowbody Captains (B737,A320,S80)

Tier 4: Large Widebody First Officers (B777 & A330)

Tier 5: Small Widebody First Officers (B767/757)

Tier 6: Narrowbody First Officers & E190 Captains (B737,A320,S80,E190CA)

Tier 7: E190 First Officers

Tier 8: Furloughees

 

USAPA

The USAPA submissions do not spell out in any amount of detail their proposed tiers, however, their pre-hearing brief describes their proposed tiers as being based upon JCBA groupings, much like the West and AAPIC proposals.

 

AAPSIC

Tier 1: Large Widebody Captains (B777 & A330)

Tier 2: Small Widebody Captains (B767/757)

Tier 3: Narrowbody Captains & Large Widebody First Officers

Tier 4: Small Widebody First Officers (B767/757)

Tier 5: Narrowbody First Officers & E190 Captains (B737,A320,S80,E190CA)

Tier 6: E190 First Officers

[Although AA has pilots who have deferred their recall from furlough, AAPSIC has not proposed a separate tier for furloughees]

 

Longevity

 

Longevity is generally defined as date of hire to the snapshot date, less furlough time, and this tenet is much less complicated than status & category. Both "date-of-hire" and "length-of-service" seniority lists are examples of pure longevity-based seniority lists.

 

Hybrid methodology

 

A "hybrid" seniority is a combination of a status & category list and a longevity-based list. Creating a hybrid seniority list involves separately creating a status & category and a longevity-based list, and then merging them according to relative weighting of the lists. Consider the following examples from previous arbitration awards:

 

Nicolau Award

Although the Nicolau Award is largely a status & category list, Arbitrator Nicolau established the "supersized" first tier of 517 East pilots (and zero West pilots), based upon the number of A330 captains and first officers, to credit East pilots for their superior longevity and attrition.

 

Delta / Northwest

A pure status & category list, however, the arbitration panel provided for the greater longevity of the Northwest pilots by adjusting the status & category tiers, and utilizing a pull-and-plug methodology to construct the list.

 

United / Continental

A pure hybrid methodology, 65% allocated for status & category, 35% for longevity.

The parties in our case have proposed integration methodologies as follows:

 

West Committee

A 65% status & category, 35% longevity hybrid list, identical to that in United / Continental.

 

USAPA

Ostensibly a 50% status & category, 50% longevity hybrid list, constructed in a non-conventional manner using a computer program developed by its committee.

 

AAPSIC

No credit for longevity.

 

Career Expectations

 

Pre-merger career expectations is a highly subjective topic, and is therefore frequently a heavily litigated topic in seniority integration proceedings. The parties have taken positions regarding pre-merger career expectations as follows:

 

West Committee

No adjustment to the proposal based upon career expectations. From the West pre-hearing brief, pages 21-22: "By reason of the competitive state of the airline industry following the Delta-Northwest and United-Continental mergers, neither American pilots nor US Airways pilots could legitimately assert that they had realistic distinct or superior stand-alone career expectations based on the economic health of their carrier. Therefore, there is no reason why the Board should place a "thumb on the scale" in favor of either pilot group in weighing the groups respective status-and-category or longevity equities based on this factor.”

 

USAPA

No adjustment to the proposal based upon career expectations. From the USAPA pre-hearing brief, page 3: "The USAPA Merger Committee proposal is based on the reality that the American-US Airways merger is a merger of equals, with each carrier contributing strengths to the new American Airlines and each carrier having needs that were best addressed by the merger. It is also based on the reality that the pilot groups are moving forward on a level playing field in the merged carrier.”

 

AAPSIC

A 50% increase in status & category ratios to the favor of pre-merger American Airlines pilots due to their superior pre-merger career expectations, in terms of (i) a superior network (ii) a superior fleet and growth opportunities, (iii) a superior competitive position, and (iv) superior compensation and benefits.

 

Widebody Protections (Fences)

 

Following are widebody protections from previous arbitration awards:

Nicolau Award

Reservation of 161 A330 Captain positions and 262 A330 First Officer positions for East pilots, expiring at the sooner of: (i) 4 years following the date of the award, or (ii) a change in the mandatory retirement age from 60 to 65.

 

Delta / Northwest

For the period of five (5) years beginning with the first bid period after the issuance of the Single Operating Certificate (SOC), no pre-merger Northwest pilot may be awarded or displaced to a vacancy on a B777 aircraft or category and no pre-merger Delta pilot may be awarded or displaced to a B787 or B747 vacancy.

 

United / Continental

For the period of five (5) years beginning with the first bid period after the issuance of the Single Operating Certificate (SOC), no pre-merger Northwest pilot may be awarded or displaced to a vacancy on a B777 aircraft or category and no pre-merger Delta pilot may be awarded or displaced to a B787 or B747 vacancy.

The parties have proposed widebody protections as follows:

 

West Committee

None. However, "out of fairness and a concern for parity, if AAPSIC proposes that a fence be imposed for the B-787s that were on order for American Airlines, and if the Panel is inclined to impose that fence, the West Committee proposes that a fence be imposed for the A-350s that were on order for US Airways for the same duration as any fence on the B-787 but commencing on the date that the Company issues the first vacancy bid for the A-350."

 

USAPA

None.

 

AAPSIC

"AAPSIC proposes a transitional fence provision, effective until the amendable date of the JCBA, providing that the US Airways Pilots (East and West) continue to hold the proportion of the Group IV Captain bid positions that they hold on the date on which the integrated seniority list is implemented.”

 

Nicolau Award

All three committees have taken positions regarding whether or not the Nicolau Award should be incorporated into the seniority award:

 

West Committee

The Nicolau Award should be used as the starting point to integrate US Airways pilots with American Airlines pilots.

 

USAPA

The arbitration panel is prohibited from using the Nicolau Award because the McCaskill-Bond statute cannot be applied retroactively to past mergers.

 

AAPSIC

A purported "middle-ground" between the East and West positions: (i) the proper starting point for the seniority integration is the three pre-merger lists in effect as of December 9, 2013; (ii) the West pilots claim to the Nicolau Award is one equity to be weighed between the East and West pilots, but not at the American pilots expense; and (iii) all "Third List" pilots should be junior to all original East and West pilots.

 

ARBITRATION HEARING INFORMATION

 

The first 9 of the 16 scheduled hearings dates will be held June 29  July 3, and July 13-16 at the following location:

 

Grant Hyatt Washington DC

1000 H Street NW

Washington DC, 20001

 

The Grand Hyatt is easily accessible from DCA and/or layover hotels by taxi, Uber, or by Metro from the Metro Center Metro Station (www.wmata.com).

 

The hearings will run approximately 9am-6pm each day, and are open to all American Airlines pilots and their significant others (space permitting). Daily arbitration transcripts will be posted immediately upon receipt from the court reporter, usually the day following each hearing, to the West Merger Committee website as well as the APA Seniority Integration web page.

 

During these first 9 days of hearings, each committee will be afforded 21 hours to put on their direct cases; including: opening statements, closing arguments, direct examination of its witnesses, and cross examination of the other committees witnesses. Witnesses will be subject to cross-examination by the other committees. The first day of the hearings, June 29, will begin with opening statements from each party. Following opening statements, USAPA will present its direct case first, which should be completed sometime on Thursday, July 2. Immediately thereafter, the West Merger Committee will begin its direct case, which likely conclude sometime early in the second week of hearings (on or around Tuesday, July 14). Upon completion of the Wests case, AAPSIC will present its direct case, completing no later than 6pm on Thursday, July 16.

 

Thank you for your continued support.

 

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