CAL council 170 update (something we can agree on)

[mishap]

Mr. Smisek: Your actions have infuriated and galvanized this pilot group to a level of solidarity never seen before. We will be successful in negotiating an industry leading JCBA that includes an industry redefining Scope/Outsourcing Section.

Today is Tuesday, December 14, 2010 and we have 9 items for your review.

Item 1: CAL and UAL Pilots Have Endured a 25.1 to 43.5 % Hourly Pay Rate Cut Since 2000

Ten years ago today, in 2000, a 12th year UAL 777 CA under C'00 was making $265 per hour and a CAL 777 CA under C'97 was making $203 per hour. Adjusted for inflation, these rates would equal $336 and $258 in year 2010 dollars, respectively. Current pay rates are $190 at UAL and $193 at CAL, which, based on the calculations above, represents a 43.5 % pay cut for a UAL 777 CA and a 25.1 % pay cut for a CAL 777 CA. Looking at it in reverse is perhaps even more discouraging: current max UAL and CAL CA pay of $190 and $193 per hour in 2010 dollars is equivalent to just $149 and $152 in much stronger 2000 dollars.


2000 Rate
ADJ for Inflation
Current 2010 Rates
2010 in 2000 $
UAL 777 12 yr
265
336
190
149 (- 43.5 %)
CAL 777 12 yr
203
258
193
152 (- 25.1 %)

Most discouraging of all are the percentage raises required to return to 2000 pay, and to have those rate adjusted for inflation. To return a 12th year UAL 777 CA to $336 would require a 77 % increase over their current rate. Even to return a 12th year CAL 777 CA to CAL's much lower 2000 inflation-adjusted rate of $258 would require a 34 % increase.

As pathetic as the destruction of our purchasing power as measured by hourly rates is, it does not even begin to address the loss of our retirement, work rules, and other contractual provisions. Each and every Continental and United pilot has cumulatively lost many hundreds of thousands of dollars of pay and benefits as a result of concessions. Meanwhile, our airlines just earned their highest profit margins since 1978, the last year our industry remained regulated by the CAB.

Item 2: Then and Now - Revenue per Pilot in 2005 vs. 2010

In the first quarter of 2005, the quarter in which concessionary Contract '02 was ratified, CAL's total revenue was $2.505 Billion, with 348 mainline jets listed in that quarter's report. By contrast, in the third quarter of 2010, the quarter just ended, CAL's revenue was $3.953 Billion, with 348 mainline jets also listed in that quarter's report. Where did our pilot seniority list stand during the two periods? The January 1, 2005 list includes 4437 pilots. The July 7, 2010 CAL pilot seniority list includes 4787 pilots. 147 pilots were furloughed during the most recent quarter, resulting in a reduction from the seniority list total to 4,640. Assuming that approximately 5 % of pilots were on various types of leaves and in management during both periods, we can determine the following:

Quarter
CAL Revenue
Active CAL Pilots
Revenue per Pilot
1st Quarter 2005
2.505 Billion
4215
$594,306.00
3rd Quarter 2010
3.953 Billion
4408
$896,779.00

The percentage increase in revenue per active CAL pilot from the quarter in which Contract '02 was ratified to the most recent quarter was 51 %! Over the same period, the percentage increase in total CAL revenue was 58 %!

Each active CAL pilot is generating an average of $3,587,116 of revenue per year based on the most recent quarter's results. Do you believe you are receiving YOUR fair share of this revenue?

Item 3: The Cost of a Strike to United Continental Management and Shareholders

Management has shown a great reluctance to acknowledge the fact that most of us have no intention of working under a permanently concessionary contract, especially as we watch our company earn its highest profit margin since 1978.

The economic cost of a strike to each and every one of us requires diligence and preparation on our part, but can easily be managed. What of the cost of a strike to our now huge airline?

As an example, even much smaller Northwest claimed that its 1998 pilot strike, a strike that lasted just 18 days cost it $630 million. They cited the cost of the 30 day cooling off period, 18 day strike itself, and 7 day “recovery period” afterward in the following news article:

http://money.cnn.com/1998/10/20/companies/northwest/

Now consider our much larger airline, circa 2010. The 3rd quarter report press release contains the following statements:

"The strong revenue performance of the two carriers reflects the commitment of our co-workers to provide industry leading-products and service to our customers," said Jim Compton, executive vice president and chief revenue officer. "As we integrate the two networks and create the world's leading airline, we will provide even more value to our customers."

Indeed:

Standalone United Airlines Third Quarter Revenue - For the third quarter of 2010, United's total revenue was $5.4 billion, an increase of 21.7 percent compared to the same period in 2009. Consolidated passenger revenue for the third quarter rose 21.4 percent, or $878 million, compared to the same period in 2009.

Standalone Continental Airlines Third Quarter Revenue - Continental's total revenue for the third quarter of 2010 was $4.0 billion, an increase of 19.2 percent compared to the same period in 2009. Consolidated passenger revenue for the third quarter of 2010 increased 20.6 percent, or $608 million, compared to the same period in 2009.

Combined, United and Continental saw 3rd quarter 2010 revenues of $9.4 billion. In just 3 months. This comes out to an average of $102.2 million per day. An 18 day strike, without accounting for the cost of the preceding 30 day cooling off period and a recovery period, would cost management and the shareholders $1.84 billion. That is, $1,840,000,000.00.

Consider just how little you must save to take 18 days off on strike by comparison!

Item 4: Rumor Control

Rumors spread just like the children’s game of telephone, in which a group of children sit in a circle, and the first child whispers a made up statement to the child sitting right next to them. Then the second child in turn passes on what they believe they heard to the child sitting right next to them. By the time the original statement goes full circle and comes back to the original child, the message usually in no way resembles the initial statement.

Unlike the game of telephone, rumors can be a damaging tool that management or others can use to create uncertainty and disunity within a work group. During this merger timeline, everyone is hungry for information and at the same time, everyone can be somewhat anxious and apprehensive about our futures. There seems to always be an information void, some can and will take advantage of this window of opportunity to create an atmosphere conducive to divide and conquer tactics.

Rumor - Regarding scope, our MEC has been very quiet lately, and the CAL MEC has given up and isn’t doing anything to defend our Scope from the egregious actions of Mr. Smisek.

Answer - Wow, where have you been the past few weeks? This one seems really hard to believe from any active Continental pilot with a pulse; however, this one was called in to your LEC Chairman very recently, who was told that, apparently, many pilots actually believe this rumor.

Reality? Within the past few weeks, we completed three extremely successful informational picketing events attended by several hundred Continental and United pilots at each event, in Newark, Houston and the new MECCA United headquarters in downtown Chicago. We have and will continue to send the message to Wall Street, the news media (national print media coverage of our picketing events) and United management that the abrogation of Continental’s scope section will not be tolerated, and most importantly the JCBA for the new United pilots will have industry redefining Scope/Outsourcing language.

As this Magenta Line is being written, CAL MEC Chairman Jay Pierce, all of ALPA’s scope experts, including the scope guru AKA the “scope pope,” Mr. Mike Abram, have been in Los Angeles defending our Scope during an expedited arbitration hearing. The arbitration award will be released before the end of the month and before Continental is scheduled to place their code on the first 70 seat outsourced jet flight.

Rumor - Regarding the JNC pay proposal there are two rumors. The first is that CAL JNC Lead Mark Adams told a pilot in an e-mail that there is no substantive change in the JCBA pay proposal from the CAL MEC Section Six Contract 08 opener. The second, is that it is common knowledge that the JNC asked for six percent over the CAL Section Six Contract 08 opener.

Answer - Both rumors are completely false. As CAL MEC Chairman Jay Pierce stated in a recent MEC Update, the differences between the CAL and UAL MEC’s over the pay proposal have been successfully resolved. The JNC has agreed on a pay proposal and both MEC’s have approved the proposal. This proposal is tentatively scheduled to be given to United management on or about December 15th. Because the company has not yet even seen our proposal, it would be inappropriate to comment on the proposal other then saying the following:

The entire CAL MEC (Three MEC Officers and Nine MEC Representatives) plus all of the LEC Secretary/Treasurers have been briefed and the Nine MEC Representatives approved the pay proposal, and we believe this pay proposal is in line with our JCBA contractual objectives.

 

[mishap]

Rumor - The CAL MEC has not been provided with the actual language of the JCBA Scope proposal.

Answer - False Before we answer this rumor, let us clarify a common misconception. All contract sections, with the exception of Scope, are first negotiated by term sheets, which are essentially very much like bullet points. Once the term sheets are completed for all sections of the JCBA, then contractual language is written from those term sheets. The Scope section is the only section, due to its complexity, for which actual contract language is a part of all proposals.

The entire CAL MEC has now been briefed twice, line by line, on our Scope proposal by Scope guru and lead JNC Scope professional negotiator Mr. Mike Abram. The first time was last spring, as a part of the CAL Section Six proposal. Last month, Mr. Abram again briefed the entire CAL MEC, plus all the LEC Secretary/Treasurers on the entire JCBA Scope proposal. The proposal met or exceeded the expectations of the entire CAL MEC.

Rumor – Since the legal merger is now completed, management can move the flying wherever they want and we will lose flying as scheduled with UAL crews to begin flying IAH/LIM. There is no incentive for United Management to negotiate a timely JCBA.

Answer – While it is true that the company does have increased flexibility to move some flying since the legal merger the second part is also true. Per our Scope section, and further codified in the Transition and Process Agreement, the CAL pilots have 100% or better block hour protection and the UAL pilots have 90% protection. This means all CAL block hours replaced on a specific route must be reallocated to another route with at least the same equipment or higher.

Additionally, until management achieves a JCBA, integrated seniority list and a single FAA operating certificate, that is, until they can allocate the equipment, flying and staffing to an appropriate crew base, they will not achieve full synergies and there will be increased crew costs with the associated move of flying. There will also be increased cost due to duplication in many areas and departments until we become a single carrier.

Item 5: Welcome home to our furloughed brothers and sisters

Our 147 +1 furloughed brothers and sisters were unnecessarily sent to the street for twenty – six months. There wasn’t a day that passed that your union and your CAL brother and sister pilots were not thinking about you. The EWR LEC Officers are very happy to welcome back the following pilots to active status, welcome home!

deleted for privacy

To date, two outstanding MEC welcome back events have been coordinated and hosted by MEC Membership Committee Chairman Scotty Johnson. The EWR LEC Officers would like to thank Scotty for his outstanding job tracking the recall of all our furloughed brothers and sisters and coordinating all the welcome back gatherings.

Please join us in personally welcoming each and every one of our brother and sister pilots back to the line soon!

Item 6: Kudos to the EWR CPO

Shortly after we took office, several negative articles appeared in the Magenta Line that were highly critical of the performance of the Newark CPO. Opinions varied as to the advisability of publishing those articles, but we still believe what we said at the time was accurate, and that saying so publicly was warranted. We also believe that when performance is positive, it is equally important to note the good, just as we had noted the bad.

Over the past several months, the Newark CPO has become much more proactive and effective in dealing with the pilots they supervise. Numerous issues are now being dealt with informally, at times even by telephone. As an example, often last year we averaged just over two grievance cases per week. In October of this year, we had two for the entire month. Items that in the past would have been automatically disciplinary are now being looked at from an educational perspective. Clearly, something has changed for the better. We hope that this change will be permanent. If only temporary, then we may again need to bring the Newark pilot’s attention to a lack of support from the CPO. However, today, what we are happy to say, is that the positive change has been noticed, and it is appreciated.

Finally, we would be remiss if we did not take this opportunity to publicly thank the entire EWR CPO administrative staff. As always, the administrative staff does an outstanding job taking care of a multitude of needs of all of our EWR based pilots.

Item 7: Recent Round of Informational Picketing

Your LEC Officers sincerely thank all of the pilots who sacrificed precious off time off to picket at the EWR and IAH events. A very special thank you to those who commuted in to picket in brutally cold winter conditions in front of the new MECCA, United headquarters in downtown Chicago.

The unity displayed was impressive. There will be many more times to volunteer your time to publicly demonstrate your resolve for a fair and equitable JCBA that includes an industry redefining scope outsourcing section in the coming weeks and months. As an aside, the very professional look of our pilots, most specifically the proper uniform appearance, was noted by many. Let’s make a sincere attempt to keep our appearance to the highest standards each and every day.

Item 8: Pilots for Kids Toy Drive

Captain Brian Heron heads up the EWR Pilots for Kids toy drive. Brian has stated that we need toys and they can be dropped with Ana in the EWR CPO until the night of Thursday, December 16th. .

The toys should comply with the following:

- New
- Unwrapped.
- Ages 2-20
- No latex because of allergies.
- Stuffed animals OK.

Item 9: Secretary/Treasurer Editorial

“We can't raise fares.”

“If we raised fares $10, no one would fly.”

“9/11 changed everything forever.”

Six years ago today, Continental pilots heard the above statements, and many others closely resembling them, again and again and again. We all know what happened, and C'02 was the disastrous result.

Please take another, very close look at the revenue numbers in Item 2. Revenue had already begun to turn around while we were still voting on C'02, in March, 2005! Three (3) consecutive fare increases “stuck” that month, and many more did by the end of 2005. In fact, the fuel cost increase in the third quarter of 2005 was double the supposedly “essential” labor cost savings realized that quarter, yet CAL earned a profit exceeding $100 million that quarter. How? Because of all the fare increases that were supposedly “impossible.” In the case of Continental pilots, concessions were not about “saving the airline,” but instead all about union-busting, via the wholesale destruction of our pilot contract. What was worst is the fact that our existing IACP C'97, before concessions, was immature, so there was no “fat” available to cut from it. Kellner successfully got blood out of a turnip. Since the beginning of 2005, CAL revenue has skyrocketed. Indeed, 2007 was the most profitable year in the company's history.

Then, our nation, the world, and our company and industry, endured and rebounded from the fuel spike and economic meltdown of 2008, the period in which Delta's current pilot contract was negotiated, which was also the period immediately following the bankruptcies of both Delta and Northwest. Senior VP of Human Resources Mike Bonds last spring referred to the current Delta contract as supposedly “a model” for pilot contracts looking forward. Nothing could be further from the truth! The current Delta contract is indeed a model, but it is a model based on: corporate bankruptcy, speculator-driven record high fuel prices, and the worst worldwide economic meltdown since the Great Depression!

By contrast, the third quarter of 2010, the most recent quarter, saw the highest U.S. Airline industry profit margins since 1978, the year before airline deregulation began to take effect. Today, during a period of record high profits, at an airline with greater than $9 billion in cash, no one should be expected to settle for a just-out-of-bankruptcy Delta pilot contract that was negotiated during an economic crisis of biblical proportions. The latest “Flight Operations Update” attempts to gloss over our company's incredible financial performance and cash balances, but do not let that lower your expectations one bit. It is management's legal responsibility to attempt to lower your expectations and provide as little in pay, benefits and retirement as they can get away with, while working you as hard as they can get away with, but their free ride on our backs is nearly over. The loan our pilot group gave management and the shareholders are due, with interest! Our four contractual cornerstones must be achieved, and will be achieved.

I know I can speak for most of you when I give the following message to management:

The current Delta pilot contract is highly concessionary, and completely unsatisfactory. We have absolutely no intention of working permanently under a concessionary pilot contract!

Captain Tim Boyens, LEC 170 Secretary/Treasurer

That is all for today. Please remember our 117 furloughed brothers and sisters and their families.

 

[Ben Franklin]

that was a great blastmail.

here's some information that may be useful, too


http://www.airlinefinancials.com/uploads/2009_mainline_summary.pdf

 

[Max Powers]

You got 2 years minimum to get that new CBA done....Just think what would happen if the red states get their new president. Say goodbye to any new contract.

 

[JI Gone OH]

You got 2 years minimum to get that new CBA done....Just think what would happen if the red states get their new president. Say goodbye to any new contract.

The Red States will probably send Sarah Palin to the plate, so I don't think we've got anything to worry about...

 

[Hvy]

You better hope not....because if Obama gets in again we'll have no country to worry about...much less a job. OK...let's hear about all of the wonderful accomplishments over the past two years.....

 

[chppr5]

You better hope not....because if Obama gets in again we'll have no country to worry about...much less a job. OK...let's hear about all of the wonderful accomplishments over the past two years.....

No doubt , because when he took office this country was in AWESOME shape.