Nevets
Well-known member
- Joined
- Oct 22, 2007
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What Do You Get for 1.95%?
The Best Pilot Union Money Can Buy
ALPA members support their union’s many activities through dues representing 1.95% of their airline income. Where does that money go? What do members get in return? These are legitimate questions, and they all have answers that point to one conclusion: The Best Pilot Union Money Can Buy
Your dues dollars pay for a level and range of services that pilots need, demand, and could not get anywhere else. With ALPA, your dues dollars buy a lot more as part of a larger group than could be afforded by an individual pilot group at 1.95% of income.
Unfortunately, we have seen a few “reports” that claim otherwise. By quoting various sources out of context, including government filings, they use innuendo and outright accusations to attack the Association and present an inaccurate and incomplete view of ALPA’s expenditures through a distorted lens. What follows is a more detailed “walk-around” to put those various expenditures into proper perspective.
Volunteers Don’t Come “Free”
One of ALPA’s biggest expense categories is the cost of supporting the vast network of pilots who volunteer their time and energies for ALPA safety, security, bargaining, and representation activities. The Association simply could not function without them. Only one pilot member is an ALPA employee getting a paycheck—the President. ALPA’s President must be independent from any one airline and responsible only to the Association’s members.
Out of both fairness and practicality, volunteers cannot be expected to foot all their own losses when performing ALPA business. Besides obvious out-of-pocket expenses, some volunteers may have to drop trips in order to perform certain functions. Long ago, ALPA recognized the need to make up for some or all of its volunteers’ lost income (always with their MEC’s support).
Flight pay loss is essential
Flight pay loss (FPL) expenditures are carefully monitored and controlled, and ALPA’s policies require each MEC to report flight pay loss expenditures to the membership on a regular basis. ALPA pays approximately one-fifth of its total dues income ($22 million in 2006 alone) toward flight pay loss. Only about 14% of that amount is to allow pilots to participate in the work of ALPA’s National Committees. The rest is paid by MECs for their pilots to work on the issues that are important to their individual pilot groups. In other words, these expenses were authorized by your local leaders to support your pilot group’s activities. Ask any volunteer: A pilot union cannot be effective without extensive use of FPL.
Your pilot reps determine National Officers’ compensation
In addition to the pilot representatives at ALPA’s 42 pilot groups, the union has four full-time National Officers: President, First Vice President, Vice President–Administration/Secretary, and Vice President–Finance/Treasurer. Their reimbursements are fixed by Board of Directors policy (your elected reps).
The ALPA Board of Directors, which is made up of the elected reps from every pilot group within our union, adopted a fixed formula for calculating presidential compensation in 1970, with modifications and additions made by the Board every four years since. In 2006, the President’s salary was based on the average pay of the highest-paying pilot position at the top three ALPA airlines. Beginning in 2007, the President’s salary is based on the average pay of the highest-paying pilot position at the top five ALPA airlines.
FPL compensation for ALPA’s three other National Officers is at the rate of the highest-paying equipment each is entitled to hold in accordance with his system seniority at his airline. All the National Officers who held office from 2003 through 2006 took the pay cuts that occurred at their respective airlines or, in the case of the President, cuts that were reflected in the airline formula approved by the Board of Directors.
FPL for National Officers is not incorporated into the ALPA disbursements in the LM-2 report because the Officers are paid directly by their airline and ALPA reimburses the airlines for the FPL costs. (Also, the National Officers receive no retirement or benefit plan other than the one provided by the contract at their airline.)
What is a “service allowance”?
All ALPA National Officers receive a service allowance (to cover expenses incurred in their duties as National Officer) and a dislocation allowance (to cover housing, meals, and travel expenses for the Washington, D.C., area, which has one of the highest costs of living in the nation). Such allowances, which are reviewed annually by the Special Compensation Review Committee (composed of five ALPA MEC chairmen) and approved by ALPA’s Board of Directors, are taxable income, so the pre-tax amounts shown on LM-2 reports are set to provide adequate post-tax amounts to cover living and other expenses, including commuting to their hometowns.
ALPA’s Executive Administrator, selected by the President, also receives FPL reimbursement and allowances under provisions identical to those of the National Officers other than the President and which are approved annually by ALPA’s Executive Council.
These allowances comprise approximately 80% of the disbursements ALPA makes to its three other National Officers and the Executive Administrator and reported on its LM-2. The remaining disbursements include vacation cash-out (consistent with the policy of the particular National Officer’s or Executive Administrator’s MEC) and reimbursement for expenses incurred while performing ALPA business. The President’s salary is also included in his disbursement amount as reported on the LM-2.
According to the BOD-approved compensation provisions for National Officers who retire while in office, ALPA will pay “the difference between what the officer earned, on average, during the six months immediately preceding becoming a Retired Member and the airline-funded retirement income he or she is entitled to receive.” This “differential pay” is paid directly by ALPA to the applicable National Officer and is also included in the disbursements on the LM-2.
All such disbursements and reimbursements are subject to policies approved by ALPA’s pilot-run governing bodies—MECs, the Executive Board, or the Board of Directors. Again—your elected reps.
Continued on next post
