DATE: August 04, 2005 RE: NWA PILOT CONTRACT PROPOSAL.
LABOR COST TARGET.
* NWA believes $1.1B total annual labor "give is necessary for a successful business plan. * ALPA contribution is $322M per year (in addition to the $250M/year per the Bridge Agreement.) * Management's position is that ALPA gets no credit for $15M revenue enhancement in the Bridge Agreement. * Management's position is that ALPA gets no credit for pension savings from a freeze. * Management views that as our non-Chapter 11 premium. Management believes credits for revenue enhancements or scope changes are inappropriate.
* On 6/21/05 NWA presented ALPA with a list of possible contract changes. * NWA believes these changes produce $322M. * Based on "UAL-bankruptcy like" contract for competitive purposes. * Management indicated that how we produce the target amount is immaterial to them. Management's proposal would reduce required pilot staffing by 1181 (in addition to the 500+ pilots on furlough).
MANAGEMENTS PROPOSED CHANGES.
* 5 year duration. * Amendable 12/31/2010. * Average pay cut of 22.3% * Eliminate Captain Augmentation. * Remove seniority list instructors. * Eliminate premium pay. * Reduce vacation (30 days max) * Cap sick leave at 850 hours * Deadhead for 50% pay and credit. * Raise monthly caps to 89 hours international and 95 hours domestic. * Trip rig to 1:4 Wide-body, 0 for Narrow-body. * Average 4:15 duty day. Other miscellaneous cuts.
* In any year NWA may schedule for wet lease 10% of international passenger block hours on aircraft types not in the NWA fleet. * In any year NWA may schedule for wet lease 10% of freighter block hours on aircraft types not in NWA fleet. * In any year, NWA may schedule for wet lease 5% of the total block hours of the company to handle peak flying opportunities. If new aircraft are on order, NWA may schedule for wet lease an equivalent number of aircraft as a bridge until the new aircraft are delivered.
* On 7/14/05 NWA presented Section 1 C. (Small Jets) proposal. * NWA stated that- * Other scope modification proposals for joint ventures, successor, and fragmentation restrictions were forthcoming. * Proposed a separate airline "Newco" for Small Narrow-body flying. * May or may not be existing carrier. * May or may not be a NWA affiliate. All Newco aircraft carry NW code.
SMALL JET NEWCO. <----------------------------------------------------------------------
* Newco would operate aircraft seating up to 100 passengers. * No numerical or use restrictions. * Separate seniority list and employment. * Flow up/flow and down provisions between Newco and NWA. * ALPA recognized as the bargaining representation. * Contract to be long term with no strike/ lockout clause. * Contract based on Regional Industry average costs. Expedited interest arbitration to settle disputes.
SMALL JET NON-NEWCO FEEDER CARRIERS (PCL, MSA).
* Could operate aircraft up to 76 seats. * No numerical or use restrictions. * Could operate aircraft of any size for other airlines. Up to 36 AVROs may be operated with NW code with 85 seats and no use restrictions.
DOMESTIC CODE SHARE.
* No restrictions on domestic code share. * Meet and confer with ALPA before entering or extending relationships. Eliminate certain DL and CO restrictions.
INTERNATIONAL CODE SHARE.
* No restrictions. * Meet and confer with ALPA before entering or extending relationships. Other miscellaneous