LAX FastRead
October 24, 2011
Fellow LA Pilots:
We have reached a critical stage in our negotiations with the Company. Last week, the Company agreed to begin putting our final proposal into language. The MEC was advised by the leadership that we would develop the language first, then decide whether to TA the proposal and send it out for pilot ratification. As you can see by this week’s MEC message, we were misled. The Company immediately put out a message indicating that we have a deal, followed by a message from the MEC leadership indicating the same.
Herb and I both believe that any deal we reach with the Company should live and die solely on its merits. We have repeatedly directed the MEC leadership to refrain from selling the deal and from using scare tactics to support a “yes” vote. All you need to do is read their recent message to see that our direction has fallen on deaf ears.
The following is our correction to last week’s message:
A number of pilots commented that AA cannot possibly bid out jet feed that quickly, but our internal analysis shows that it is possible, especially in the early years, which are most critical to Eagle. What is necessary for Eagle’s long-term survivability is the ability to grow and acquire flying elsewhere in the industry to offset any decrease in AA flying. Unfortunately, the current ASA contains such a rapid decrease in AA feed flying that it does not guarantee sufficient time to win feed contracts with other airlines.
Other pilots have commented that AA cannot afford to have Eagle fail. Although there is some validity to that comment, it is true only for the period of time necessary for AA to diversify its feed to other providers. Once again, our analysis shows that there is sufficient capacity available from our competitors to accomplish AA’s feed-diversification goal at a rate quicker than Eagle may be able to tolerate. In fact, upon the announcement of Eagle’s divestiture, a number of regional airlines inquired about bidding for AA feed flying.
In reality, the MEC has not been presented with any evidence to support the “internal analysis” done by the MEC office. We have only been told that other carriers are interested in our flying. When I inquired how other carriers had an excess of pilots and capacity, the leadership’s response was that several carriers were engaged in pro-rate flying which could easily be abandoned for more lucrative fee-for-departure flying. The regional industry typically does two types of flying: fee-for-departure and pro-rate. Fee-for-departure pays the carrier a flat rate to travel between points regardless of passenger count. In a pro-rate arrangement, the contract carrier income is based on the revenue generated on the route. No revenue equals no profit and potentially a loss. The percentage of pro-rate flying done in the regional world is a small fraction of the flying we currently do for American. Don’t be afraid of a straw man.
With respect to the impact on the LAX and JFK domiciles under the seniority wage band concept, every Captain in these domiciles will receive a raise. This is because the LAX- and JFK-based Captains’ seniority falls within either the CRJ Wage Band and they already fly the EMJ. Therefore, all Captains in these domiciles will now receive either CRJ pay, seniority permitting, or EMB-145 pay despite the fact that the CRJ and EMJ-145 are not operated in those domiciles.
The leadership chose to single out our domicile because Herb and I have shown opposition to the “deal.” They believe that the vast majority of our pilot group adamantly supports the path we have taken. They say that we tend to only hear from the 10 percent of the group who would complain regardless of what was on the table. Herb and I have engaged better than 2/3 of our pilots in LA. Your message has been consistent, and we have taken that message back to the MEC table. The reference to all LA captains is an attempt to appeal directly to you with the belief that you will say “Wow, I get a raise?! Where do I sign?!” There are several negative effects related to the wage band concept that you will not see in any MEC message. For example, if the Company finally opens a CRJ base in LAX, those pilots in the EMB seniority band will still receive EMB pay while a pilot seven years junior to you will be sitting on ready reserve being paid at CRJ rates because they were grandfathered while based in Chicago or N.Y.
If the MEC approves the final language of the deal, it will be sent out to you for ratification. There are many positive elements and many negative elements to this deal. In a nutshell, we are purchasing a longer term ASA with American with a seven-year extension to our contract. Herb and I encourage you to think critically, see through the spin, and make a well-informed decision. We are both available to answer any questions you may have.
Fraternally,
HM
BS
