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NWA managements proposal!

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Douglas metal
Feb 27, 2003
I apologize for the cut and paste job, however, I figured this would be interesting to post.



October 5, 2005

NWA Management’s 09/27/05 Pilot Concession Proposal
The NWA management presented ALPA with an updated (post-C11 filing) Labor Cost Restructuring “Term Sheet” on September 27. Most, if not all, of this proposal will be included in the 1113© filing that NWA is expected to present in Bankruptcy Court as early as this week.

An Across the Table from the Negotiating Committee, which gives an overview and perspective of the proposal from the Negotiating Committee, was distributed to all pilots via e-mail and USPS on September 28. This update will address some of the specifics and offer some perspectives regarding management’s proposal.

· Management’s estimated “steady state” (once all of the contract changes’ benefits are fully realized) value for this proposal is approximately $362M annually (averaged from 2007 to 2010). Their 2006 value is $325M.
· These values still do not include credit for a pension freeze or benefits from any potential legislative relief, even though both would result in a substantial decrease in Pilot Cost per Available Seat Mile (P-CASM). This is the parameter that management is using to compare us to other carriers and target our cost reduction. They are attempting to require the full reductions to be derived from pay and work rule changes only (even though the cost savings due to pension freeze and any legislative relief will result in additional P-CASM savings below the cost target).
· These values do not include any credits for their proposed changes to scope.
· The proposed contract term is through 1/1/2011.

Pay Rates
Disclaimer. Please note that the discussion/analysis of this and the other components of management’s proposal should NOT be construed as an endorsement, or even tacit acceptance, of management’s proposal. Management’s proposal is a disgusting, opportunistic, overreaching, greedy, shameless attempt to permanently decimate our careers at NWA, and substantially contribute to the degradation of the profession. This update is intended not only to convey elements of their proposal, but also to show the absurdity and potential impact of some of their proposals.

· Average 28.4% reduction in hourly rates achieved through five pay groupings. The cuts are not across the board. Generally, the more senior wide-body positions receive lesser (%) reductions, and more junior positions receive the greatest (%) reductions. (B747 CA & FO would see a 19% reduction, while a DC9 FO would see a 45% reduction. A320 CA & FO would also see a disproportionate reduction in the 30% + range.) See the following tables.
· These hourly pay rates were derived in the following manner (for both CA and FO positions).
o B747-400 and B747 rates are UAL B747-400/B777 rates.
o B787, A330, and DC10 rates are US Airways A330 rates.
o B757 & A320 rates are the respective US Airways rates.
o DC9 rates are US Airways/America West Embraer 190 rates. (Generally a 90-seat aircraft.)
o B747 and DC10 SO rates are US Airways B757 FO rates.
· Additional 5% pay rate reduction while NWA remains in C11.
· No pay raises for the term of the agreement (through 1/1/2011).
· Premium Pay and International Premium eliminated.
· These pay rates were “cherry picked” from the worst in the industry for each category.

· The first pay table shows management’s proposed pay rates and the % reduction from the current Bridge Agreement (BA) rates. Pay rates for category and years of service combinations that don’t currently, or won’t likely, exist in the pilot group have been omitted. The last row represents Year 12 rates –5%.
· The second table shows actual % pay reductions which include a change in category/seat.
· The third table is a pay rate comparison with other airlines.

Proposed Rates / percentage reduction from BA. Rounded to the nearest $ and 0.1%.
YOS B744
CA B747
CA B787
CA A330
CA B757
CA A320
CA B744
FO B747
FO B787
FO A330
CA B757
FO B747
SO A320
777 UAL
777 US
330 US
330 US
330 US
757 US
320 UAL
777 UAL
777 US
330 US
330 US
330 US
E190 US
757 US
757 US
757 US
320 US/HP
12 179
-22.9 179
-19.0 160
-25.2 160
-23.7 160
-23.3 144
-23.0 125
-30.6 122
-22.6 122
-18.6 109
-24.9 109
-23.4 109
-23.0 99
-39.3 98
-22.6 98
-25.8 98
-21.2 85
-30.3 61
11 123 121
-22.8 121
-18.9 108 108
-23.7 108
-23.3 97
-39.6 97
-23.0 97
-25.5 97
-20.9 84
-30.7 60
10 122 120 120
-18.6 106 106
-23.5 106
-23.1 96
-39.9 96
-22.8 96
-25.8 96
-21.3 83
-30.6 59
9 118 118 105 105 105 95 94
-22.3 94
-25.9 94
-21.3 82
-30.3 58
8 103 103 103 94 93
-20.7 93
-24.8 93
-20.2 81
-28.9 58
7 101 101 101 93 91
-20.8 91
-24.7 91
-20.0 79
-28.9 56
6 98 98 98 93 89
-21.1 89
-24.8 89
-20.2 77
-29.3 55
5 96 96 96 92 87
-21.2 87
-24.8 87
-20.1 75
-29.5 53
4 94 94 94 91 85 85 85 73 52
3 79 79 79 90 72 72 72 62 44
2 73 73 73 89 66 66 66 57 41
1 25 25 25 89 25 25 25 25 25
-5% 170 170 152 152 152 137 119 116 116 104 104 104 94 93 93 93 81 58

Aggregate pay reductions
· The next chart shows percentage pay reductions that would result from management’s proposed pay reductions and changes in category/position as a result of displacements and, in a few cases, awards.
· The table is arranged with the highest-paying categories beginning at the top/left, and the lowest-paying categories at the bottom/right.
· Rate reductions to a lower paying category are shown in red; reductions that include movement to a higher paying category, are shown in blue.
· The pay category moves not represented in the chart are moves that will likely never occur (i.e., B744 CA to A320 FO).
· Moves from the B787 are not shown since there are not currently any pilots in that category.
· C = Captain; F = First Officer; S = Second Officer
· All rates are year 12.
· Three pay categories down and one pay category up are bolded due to the reasonable expectation of movement direction during the term of the next contract.
· These reductions are in addition to the 15% pay reductions included in the Bridge Agreement.

Current Category vs. Displaced / Awarded Category. Percent change rounded to nearest 0.1%

744C 747C 787C 330C D10C 757C 320C 744F 747F 787F 330F D10F DC9C 757F 747S D10S 320F DC9F
744C -22.9 -22.9 -31.3 -31.3 -31.3 -38.0 -46.2 -47.4 -47.4 -53.1 -57.6 -57.6
747C -19.0 -19.0 -27.8 -27.8 -27.8 -34.8 -43.5 -44.7 -44.7 -50.7 -55.5 -55.5
787C -25.2
330C -14.4 -14.4 -23.7 -23.7 -23.7 -31.1 -40.3 -41.6 -41.6 -47.9 -47.9 -53.0 -53.0
D10C -14.0 -14.0 -23.3 -23.3 -23.3 -30.8 -40.0 -41.3 -41.3 -47.6 -47.6 -47.6 -52.6 -52.7 -52.7
757C -4.3 -4.3 -14.7 -14.7 -14.7 -23.0 -33.2 -34.6 -34.6 -41.7 -41.7 -41.7 -47.3 -47.4 -47.4 -47.4
320C -0.6 -0.6 -11.3 -11.3 -11.3 -20.0 -30.6 -32.1 -32.1 -39.4 -39.4 -39.4 -45.2 -45.3 -45.3 -45.3 -52.6
744F +13.3 +13.3 +1.1 +1.1 +1.1 -8.8 -20.9 -22.6 -22.6 -31.0 -31.0 -31.0 -37.6 -37.7 -37.7 -37.7 -46.0 -61.3
747F +19.0 +19.0 +6.2 +6.2 +6.2 -4.1 -16.9 -18.6 -18.6 -27.4 -27.4 -27.4 -34.4 -34.5 -34.5 -34.5 -43.2 -59.3
787F -24.9
330F +26.0 +26.0 +12.2 +12.2 +12.2 +1.3 -12.2 -14.1 -14.1 -23.4 -23.4 -23.4 -30.7 -30.8 -30.8 -30.8 -40.0 -57.0
D10F +26.5 +26.5 +12.8 +12.8 +12.8 +1.8 -11.7 -13.6 -13.6 -23.0 -23.0 -23.0 -30.3 -30.5 -30.5 -30.5 -39.7 -56.8
DC9C +9.2 +9.2 -1.8 -1.8 -1.8 -11.4 -23.2 -24.8 -24.8 -32.9 -32.9 -32.9 -39.3 -39.5 -39.5 -39.5 -47.5 -62.4
757F +40.1 +40.1 +25.5 +25.5 +25.5 +13.3 -1.8 -3.9 -3.9 -14.3 -14.3 -14.3 -22.5 -22.6 -22.6 -22.6 -32.9 -51.9
747S +35.0 +35.0 +20.4 +20.4 +20.4 +8.7 -5.8 -7.8 -7.8 -17.8 -17.8 -17.8 -25.6 -25.8 -25.8 -25.8 -35.6 -53.9
D10S +43.3 +43.3 +27.8 +27.8 +27.8 +15.4 0.0 -2.1 -2.1 -14.6 -14.6 -14.6 -21.0 -21.2 -21.2 -21.2 -31.7 -51.0
320F +46.2 +46.2 +30.4 +30.4 +30.4 +17.7 +2.1 -0.1 -0.1 -10.9 -10.9 -10.9 -19.4 -19.6 -19.6 -19.6 -30.3 -50.1
DC9F +61.9 +61.9 +44.4 +44.4 +44.4 +30.3 +13.0 +10.6 +10.6 -1.4 -1.4 -1.4 -10.8 -11.0 -11.0 -11.0 -22.8 -44.7
Updated Pay Rate and Comparison Tables.
· While pay isn’t the only parameter that determines contract cost, it is significant and is the easiest to quantify.
· All rates are Year 12, unless noted, and are rounded to the nearest $.
· DAL management 1113© proposal for DAL ALPA includes a 19.5% uniform cut in hourly rates.
· Hourly rates are listed in order using the 757 rates where available and the individual airline’s largest aircraft rate when 757 rates are unavailable.
· Other airlines’ rates are based upon the highest rates during their specific contract’s term.

Captain Rates
A/c or equiv. B747-400 B747/777 B787 A330 DC10 B757/67 A320/737NG DC9/737/
Airborne 234 195
SWA 187 187
NWA (Now) 232 221 213 209 208 187 180 163
Astar-DHL 204-15
A300 185-15
DAL (Now) 216 181 173 156
Midwest 155-16
FedEx 206 178
Air Tran 172 153
KittyHawk 727 175-20
NWA-10% 208 199 192 188 185 167 162 146
AMR 200 166 158 144
Hawaiian 165 165 149
UPS 190
CAL 186 163 163 144
Frontier 156 156
Alaska 154
NWA-15% 197 188 181 178 175 158 153 138
Air Canada 194 154 140
UAL 179 179 150 129 129
NWA-20% 185 177 171 167 165 149 144 130
A320 140
KittyHawk 727 146-12
DAL 1113©
Proposal 174 145 139 126
JetBlue 139 89 (E190)
Aloha 128 120
NWA 1113©
Proposal 179 179 160 160 160 144 125 99
Atlas 166
US Airways 160 144 125 125
NWA-25% 174 166 160 157 155 140 135 122
Gemini 155
Spirit (MD80) 138 (A321) 125
Temporary 170 170 152 152 152 137 119 94
America West 134 134 99
ATA 145 132 119

First Officer Rates
A/c or equiv. B747-400 B747/777 B787 A330 DC10 B757/67 A320/737NG DC9/737/
Airborne 152 127
SWA 131 131
FedEx 144 127
NWA (Now) 158 150 145 142 141 127 122 110
DAL (Now) 147 123 109 109
Aloha 91 86
Hawaiian 115 115 104
Midwest 101-15
NWA-10% 142 135 131 128 127 114 110 100
Astar-DHL 125-15 114-15
AMR 136 113 108 98
UPS 127
CAL 127 111 111 98
NWA-15% 134 128 123 121 120 108 104 94
Air Canada 129 104 96
UAL 122 122 102 88 88
NWA-20% 126 120 116 114 113 102 98 89
Kitty Hawk 727 100
Alaska 97
Frontier 94 94
DAL 1113©
Proposal 118 99 88 88
NWA 1113©
Proposal 122 122 109 109 109 98 85 61
Atlas 116
US Airways 109 98 85 85
NWA-25% 119 113 109 107 106 95 92 83
Gemini MD11 103
America West 94 94 94
Temporary 116 116 104 104 104 93 81 58
Air Tran 89 79
ATA 92 83 77
Independence 82
JetBlue 76 53 (E190)
Spirit (MD80) 71 (321) 65

Regional Aircraft Pay Rates. (Year 12 unless noted.) Prioritized in order of Year 12 Captain rates.

Captain First Officer Captain First Officer
CRJ-700 101
121(18) 46
49 (8) ASA
CRJ-700 86
103 (18) 41
45 (8)
US Airways/AWA
EMB 190 99 61 ExpressJet
(2007) E145 85
97 (18) 40
44 (8)
NWA DC9 1113c 99 61 ACA/Ind.
CRJ (2007) 84
101(18) 41
45 (8)
CRJ-700 99
118 (18) 47
51 (8) AMR Eagle
CRJ-700 83
94 (18) 36
38 (8)
B-146 (2010) 96
122 (20) 46
54 (10) MidAtlantic
EMB-170 82
93 (18) 37 (7)
Temporary 94 58 Skywest
CRJ 78
93(18) 40 (6)
Avro 85
(2008) 91
104 (18) 38
42 (8) Pinnacle
CRJ-200 76
82 (15) 34
36 (7)
DAL 100-seat
1113c 89 60 Tran States
ERJ-145 76
82 (15) 35
JetBlue EMB 190 89 53 Skyway
D-328 (2007) 75
84 (18) 35
37 (9)
PSA (2009)
CRJ-700 89
101 (18) 39
41 (8) Island Air
DH-8 64
73 (19) 30
35 (8)
(2007) 87
108 (20) 37 (4) Big Sky
Metroliner 46
52 (21) 29
35 (16)

Monthly Maximums, Reserve, and Guarantees
· Caps at 89 hrs. for widebody (WB) + 757; 95 hrs. for A320 and smaller.
· Blockholder minimum guarantee: 65 hrs.
· Reserve guarantee reduced to 70 hrs.
· Reserve days off reduced to 12 for WB + 757; 10 or 11 for A320 and smaller.
· These types of parameters would be very difficult to implement unless contract language was also added which increased scheduling efficiency . . . not decrease it, as proposed two sections below.

Long-Range Operations
· Replace CA Augmentation with FO augmentation. Management’s implementation proposal TBD.
· No crew bunk or Business Class seat required for augmented flights 9 hrs. or less. Coach seat would be used instead.
· This parameter of the proposal is likely related to possible future use of B757s in Extended Range Operations across the North Atlantic. Regardless of this, using a coach seat for a rest seat is a fatigue/safety issue.

Trip Rigs
· Trip hour credit increased to 1:4 for WB + 757. No THC for A320 or smaller. Currently 1:3.5.
· Eliminate minimum day and establish 4:15 average day.
· Ultimately, changes in trip rigs will likely save NWA very little money. All they will do is serve as a disincentive for management to schedule pilots efficiently. The only result will be more time away for less pay.

· Reduce annual vacation accruals to 42 days maximum and 14 days minimum. Currently 44 & 16.
· Vacation pay reduced to 2.8 hrs/day. Current CBA is 3.5 hrs/day.

Sick Leave
· Reduce the sick leave cap to 850 hrs and reduce all earned balances to 850. (No grandfathering). Currently 1200 with grandfathering.
· Reduce the accrual rate to 5 hrs/month if no sick leave is used in the month. If sick leave is used, the accrual for the month would be 0. Current accrual rate is 12hrs/month; 5 hrs if sick leave was used.
· Something called “Enhanced Sick Leave Management/Harassment.” See below.
· Full month of sick leave paid at 66%. Trips missed paid at 75%.
· Reserve sick days paid at 75% of normal daily rate (approx. 2 hrs/day vs. 2:40).
· Coaching/counseling begins after first sick call in a rolling 12-month period.
· A “Level 1” disciplinary notification will be issued after the third sick call in a 12-month period.
· A “Level 2” disciplinary notification issued after the fourth sick call.
· Increased scheduler and PENTRY harassment allowed after the first sick call.
· Doctor’s note required for the third sick call and beyond.
· Base managers conduct “coaching/counseling” sessions for attendance reliability, which includes sick calls.
· Pilots flying “past the Regulated Age” must maintain a current first-class medical certificate. If a pilot in this group is unable to maintain a first-class medical, they will not be eligible for sick pay. If on extended sick leave, these pilots would be subject to a Company Medical Exam. [Hmmm, sounds like age discrimination. Perhaps management feels that they can get away with anything in the 1113 process.]
· A pilot on short-term sick leave will be required to call Crew Scheduling daily during a sick leave period.
· Once a pilot ends his/her period on short-term sick, the pilot may be placed back on their original trip at the scheduler’s discretion.
· Pilots are not eligible to use the Family Medical Leave Act (FMLA). [Gee, another Federal law that management doesn’t believe applies.]
· Create a Trip Trade Bulletin Board (TTBB) for mutual trip trades.
· Close-in personal leaves may be granted by Scheduling providing the pilot has already attempted to drop/ change trips using monthly bidding, open time bidding, and the TTBB. (No holidays, though.)
· Clearly management’s intention is to attempt to intimidate and harass pilots into not calling in sick, which will likely cause pilots to fly while they are sick. At the very least, pilots will be more likely to pass illnesses on to other pilots and co-workers. In the worse case, this management coercion may cause pilots to violate FARs and degrade safety by flying while sick due to fear of discipline or loss of income.

· Non-seniority list instructors would perform all ground training functions other than checking events.
· Expand mandatory distance learning. Reduce pay to 50%/0 credit.
· Add more “flexibility” for training with the introduction of new aircraft types.
· All of these proposals combined are very likely to reduce the quality and effectiveness of training.
· Training freezes of 5 years for movement within a pay grouping and 2 years for moves outside of a pay grouping.

Deadheading. 50% pay and credit. [More incentive for inefficient scheduling that will ultimately lead to a minimal cost savings not commensurate with the negative impact upon pilots’ work experience.]

Scheduling. Eliminate open time in the bidding process, and eliminate the staffing formula.

Hours Flown
· Credit would be the greater of scheduled or actual per trip. Current is per leg.
· Change the Section 30 scheduling rules to reflect the company interpretation of scheduling/rescheduling assignment of flying.

· Eliminate domestic crew meals.
· Eliminate the Foreign Base Allowance and Cost of Living Allowance.
· Eliminate downtown hotel requirement. Minimal cost savings not commensurate with the substantial degradation of pilots’ working conditions.
Section 27; Insurance and Medical. Changes in the NWA Group Medical and Dental Plan. Basic Overview:
· Contribution amount raised to 25% and will include all employee groups. Currently 20%
· Deductibles: In network: $350/$700; Out: $700/$1400. Indexed for inflation.
· Out-of-pocket maximum: In: $2750/$5500; Out: $5500/$11,000. Indexed.
· Maximum lifetime benefit: In: Unlimited; Out: $1,000,000.
· Office visits, lab services, diagnostic procedures & x-rays, outpatient facility charges, hospital charges, medical equipment, etc. now have differences in In and Out of network provider charges. In: 20% after deductible; Out: 30% after deductible.
· Coordination of benefits changed so that if NWA is the secondary benefit provider, the total payment on the claim will be no more that what NWA would have paid if they were the primary plan provider. Same changes for the Dental Plan.
· If a working spouse has coverage available through their own employer, they are not eligible for coverage through NWA. Same changes for the Dental Plan.
· Changes in the manner pharmacy benefits are provided.
· Dental Benefits. Increases in the co-pay amounts and deductibles.
· Expect a more complete briefing once negotiations have begun on any possible changes to Section 27.

Pension Freeze
· Freeze the current Defined Benefit Plan.
· Negotiate a follow-on Defined Contribution (DC) plan. No DC percentage yet specified. [Management had offered AMFA a 5% follow-on DC plan and implemented a follow-on DC Plan for the management/salaried plan that was tiered and averaged just above 10%.]

Retiree Medical Benefits. Currently under review for current and future retirees. The Company would “reserve the right to propose changes” in these areas.

Profit Sharing Plan
· All employees on the payroll as of each December 31 of the plan year would be eligible.
· Payout of 10% of all pre-tax income, “excluding extraordinary items,” in excess of $1,000,000 with no cap.
· Payout made annually by the following April 15.
· Distribution to be calculated as a uniform % of all W2 wages, excluding paid sick benefits.

SCOPE. Extensive changes, including the previous “Newco” proposal.

· May or may not be an existing carrier or an NWA affiliate.
· All NEWCO aircraft will carry the NW code and may carry code of NWA code-share partners.
· NEWCO aircraft would seat up to 100 passengers, and be the exclusive operator of Airlink aircraft seating between 77 and 100 passengers.
· No numerical or use restrictions.
· Separate seniority list and employment.
· Flow up and flow down between NEWCO and NWA.
· ALPA would be the recognized bargaining agent.
· The CBA would be a long-term agreement with a no-strike/no-lockout clause.
· The NEWCO contract would be based upon Regional Industry average costs, would be of long-term duration, and would contain a no-strike clause and binding expedited interest arbitration clause. This clause would require the arbitrator to apply a regional airline industry average pilot labor cost standard.
[This is simply an attempt to create yet another entity to outsource flying, divide the pilot group, and whipsaw it against mainline and the other Airlink carriers. There is no believable argument why this flying cannot be cost-effectively accomplished by NWA pilots flying NWA aircraft by accommodating pay rates and work rules within the NWA pilots’ CBA. This could be one of the (many) “show-stoppers” in the upcoming bargaining process.]

Other SCOPE changes:
· Mesaba and Pinnacle could operate up to 76-seat aircraft.
· No MSA or PCL numerical or use restrictions.
· MSA and PCL could operate aircraft of any size to operate/code-share for/with other airlines.
· The 35 Avros would be allowed to have 85 seats (currently 69) without use restrictions.
· NO Domestic code-share restrictions.
· Eliminate certain DL and CO alliance restrictions.
· NO International code-share restrictions.
· Allow wet leasing up to 10% of international block hours on aircraft not in the NWA fleet.
· Allow wet leasing up to 10% of freighter block hours on aircraft not in the NWA fleet.
· Allow wet leasing up to 5% of total block hours to handle peak flying opportunities.
· Allow wet lease of an equivalent number of aircraft to be operated as a bridge until new aircraft on order can be delivered.
· Various changes to successorship language.
· Changes in the contract section that addresses Labor Protective Provisions. [The proposed changes still include some of the requirements for pilots to transfer in a substantial asset sale and
· a requirement to provide for a “fair and equitable” seniority integration, but also include some further exceptions and additional “weasel-wording” that will make it easier for management to work around the contract sections.]
· Remove the “No Layoff” protection language contained in Section 1.D.1 that management forgot to remove after the Bridge Agreement.
· Include a “No Strike” clause.
· Delete/amend several Letters of Agreement (LOAs) that address scope issues.

Review of the pertinent portions of Section 1113 of the U.S. Bankruptcy Code. An attachment covering this section was included in the September 23 Ziplines.
· 1113(a). “The debtor . . . may assume or reject a collective bargaining agreement only in accordance with the provisions of this section.”
· 1113(
. “Subsequent to filing a petition and prior to filing an application seeking rejection of a collective bargaining agreement (CBA), the debtor . . . shall:
o Make a proposal to the authorized representative of the employees (union) covered by such an agreement, . . . which provides for those necessary modifications in the employee’s benefits and protections that are necessary to permit the reorganization of the debtor and assures that all creditors, the debtor, and all affected parties are treated fairly and equitably; and
o Provide, . . . [the union] with such relevant information as is necessary to evaluate the proposal.”
During the period beginning on the date of the making of a proposal . . . and ending on the date of the hearing, . . . the [debtor] shall meet, at reasonable times, with the [union] to confer in good faith in attempting to reach mutually satisfactory modifications of such agreement.”
· 1113©. “The court shall approve an application for rejection of a CBA only if the court finds that:
o the [debtor] has, prior to the hearing, made a proposal that fulfills the requirements of [1113(
o the [union] has refused to accept such proposal without good cause; and
o the balance of the equities clearly favors rejection of such agreement.”
· 1113(d). “Upon the filing of an application for rejection the court shall schedule a hearing to be held not later than 14 days after the date of the filing of such application. All interested parties may appear and be heard at such hearing. . . . The court may extend the time for commencement of such hearing for a period not exceeding 7 days where the circumstances of the case, and the interests of justice require such extension, or for additional periods of time to which the [debtor] and [union] agree. The court shall rule on such application for rejection within 30 days after the date of the commencement of the hearing. In the interests of justice, the court may extend such time for ruling for such additional period as the [debtor] and the [union] may agree to. If the court does not rule on such application within 30 days after the commencement of the hearing, [or within additional time that is mutually agreed to], the [debtor] may terminate or alter any provisions of the CBA pending the ruling of the court. . . .”
· 1113(e). “If during a period when the CBA continues in effect, and if essential to the continuation of the debtor’s business, or in order to avoid irreparable damage to the estate, the court, after notice and a hearing, may authorize the [debtor] to implement interim changes in the terms, conditions, wages, benefits, or work rules provided by a CBA. . . .”
· 1113(f). “No provision of this title shall be construed to permit a [debtor] to unilaterally terminate or alter any provisions of a CBA prior to compliance with the [previously stated] provisions. . . .”

Basically all this has been “interpreted” to mean:
· Once the 1113© filing is made, a two- to three-week period follows before an official 30-day negotiating period is required to commence. This is where the oft-repeated 51-day timeline to a new agreement is derived.
· During this period, management and the unions will attempt to reach a mutual (ratified) agreement.
· If a union and management are unable to reach an agreement, the judge may grant an extension to the negotiating period, or allow “rejection” of the CBA, which essentially would lead to some type of imposed, involuntary work rules.
· Under the Railway Labor Act (RLA) Section 6, an involuntarily imposed contract or terms allows for the specific employee group to seek “self-help,” of which a strike is one form.
· However, a currently open legal question is whether or not the U.S. Bankruptcy Code trumps the RLA. If it is legally determined that it does, the result could be that the employee group could not go on strike until the Company emerges from Bankruptcy Court protection/C11. Thus far, the issue has not been forced; all employee groups of recently bankrupt carriers have settled before a contract was involuntarily imposed on them. The two groups that got the closest were the UAL FAs and the ATA pilots.
Management may ask the court for interim relief at any time during this process. This relief could be in the form of wages, work rules, or benefits, providing that they are of a nature that a return to the status quo could be achieved after the interim relief period has ended. The relief could be granted if management can prove that such relief is essential for the continuation of the operation of NWA, or is necessary to avoid irreparable harm to NWA.

Summary and Perspective
· Management’s proposal is excessive, overly opportunistic, and overreaching . . . just as most expected it to be.
· It contains parameters that exceed those implemented at UAL and US Airways, which have either been in bankruptcy for almost three years or are on their second trip through C11 during the same period.
· Management has set an annual dollar-value cost-reduction target for NWA pilots that is $30M+ greater than the $325M target that DAL management has set for their pilot group of 7,000+ pilots. The DAL proposal includes hourly rate reductions of 19.5% from a rate structure that is currently only 2–3% below NWA pilot hourly rates.
· While management is focusing on a dollar value for labor cost reductions, the ultimate metric that will be used in constructing, evaluating, and gaining approval of a business plan will be reductions/improvements in unit cost (Cost per Available Seat Mile – CASM).
· Real reductions in Pilot CASM will ultimately determine whether management will be back asking for more prior to emergence from C11. This is much more important than in previous negotiations where management issued a number that had to be met, usually for the financial community’s “acceptance,” and management and the union attempted to meet this number through the awarding of “hard” and “soft” credits. Emergence from C11 will require a review of the cost reductions over the next few quarters to evaluate the real unit cost reductions that have been achieved and determine if more are required prior (to emerging).
· Management’s proposal addresses areas where significant reductions in P-CASM will result (pay rates, raising the monthly maximums, reducing vacation days and value, augmentation). Agreement on reasonable and necessary reductions in these areas should be the focus.
· However, there are other areas where working conditions will be substantially degraded far in excess of their savings value and will ultimately result in little or no reduction in P-CASM—in reality meaning that we degraded these areas for “free.” Examples of these areas from management’s current proposal are the elimination of “downtown” hotels, ridiculously long training freezes, coach seats instead of crew bunks or WBC seats, Enhanced Sick Leave “Harassment,” reduction of the sick leave cap with no “grandfathering” of earned accruals, elimination of FBA/COLA. Changes in these areas will simply result in daily compound irritants to working conditions already degraded by the major changes to our contract. A good example of one of these areas from the Bridge Agreement was the loss of day rooms in return for “comfortable and adequate” crew lounge facilities, which were far from timely in materializing.
· There are still other proposed changes that may look OK on paper from a cost-reduction perspective that will likely produce little actual CASM reduction value, but will also significantly degrade working conditions, increase fatigue, and impact safety issues. Examples of these areas are the proposed changes/elimination to trip rig, 50% pay/credit for DH, Enhanced Sick Leave Harassment, changes in scheduling/rescheduling rules, etc. Many of these are likely to produce little real CASM improvement value because all they really accomplish is to encourage management/scheduling to schedule less efficiently and cover their staffing problems/mistakes with more pilot availability.
· The most egregious insult in management’s proposal is their continued unwillingness to incorporate contract parameters that would maintain the 70-to-100-seat flying in the mainline operation with the NWA pilot group. All management can come up with is the same old tired solutions of outsourcing more and more flying to regional affiliates, code-share partners, etc., while furloughing hundreds and hundreds of NWA pilots, providing them with few options other than the “privilege” to start out at the bottom of the Pinnacle Airlines seniority list. Totally unacceptable!
· So, what are our options? What effect can we have on our current situation? Are we just powerless to stop management from ramming this type of proposal through? Is the situation hopeless? Should we just give up?

o NO!!!!!!!!!!!!!! OF COURSE NOT!!!!!!!
o We have less leverage than during a standard negotiation, but there are points of leverage available.
o We will negotiate in good faith . . . and (regardless of their ridiculous proposal) expect management to do the same. (However, we MUST be prepared if management does not negotiate in good faith, or if they expect the pilots to take a disproportionate share of the concessions; neither should surprise us.)
o We will make every attempt to reach a reasonable, consensual collective bargaining agreement.
o We must prepare the best-case proposal and strategy possible, for negotiations and for court.
o If we cannot reach a reasonable agreement with management, which can be ratified by the membership in the time allotted by the process, we must press the court for more time.
o If we are unable to mutually agree with management, or are not allowed more time for further effort, we must be prepared for, and be willing to accept, adverse decisions imposed by the court.
o Above all, we must be willing to press the “self-help”/strike issue at the legally appropriate time to maintain both a credible negotiating posture and the capability to respond effectively if unreasonable/unfair working conditions are forced upon us. Without the fortitude to assert this right, we will be unable to prevent “terminal” damage to our careers and our profession.


Bill Bartels
C20 VC/First Officer Rep
The item for me (yes, ultimately it is all crap) that really helps exemplify the anti-labor/arrogance of management is the: "· Pilots are not eligible to use the Family Medical Leave Act (FMLA)."

Management thinks they can, at a whim, overrule federal law??? Whats next, ignoring minimum required duty times? Who needs those pesky federally mandated aircraft inspections.........:rolleyes:
JohnDoe said:
The item for me (yes, ultimately it is all crap) that really helps exemplify the anti-labor/arrogance of management is the: "· Pilots are not eligible to use the Family Medical Leave Act (FMLA)."

Management thinks they can, at a whim, overrule federal law??? Whats next, ignoring minimum required duty times? Who needs those pesky federally mandated aircraft inspections.........:rolleyes:

I believe I get a hard copy of that one, apply for an FMLA leave, get it denied, and then run for lawyer. Someone correct me, but employers can't pick and choose who's eligible for FMLA can they ???
Here is how they will try to weasal around the FMLA act. The law states to be eligable you have to work for 1250 hours within the the preceeding 12 months. They will try to state that since pilots are hourly employees, and NWA pilots will be capped at 95 hours per month, they will not achieve the 1250 hours required to be eligable for FMLA. It is a weak argument but one can see that it will require time and effort to get corrected, tiume and effort by the employee. This same type of crap was presented to me at IDE when I was employed there, and after mucho effort it was taken care of by the Union during a side letter.

IMO it will be used as a bargaining chip and later dropped after getting something else.

www.dol.gov has all the details on FMLA.
Good point peleton. However, it seems like it would be pretty easy to show your time "on the job" with your per-diem pay, ie: your total time away from base, duty hours, etc..

Who knows....it's all getting pretty ridiculous.
Interim agreement this P.M. 23.9 % pay cut accross the board. DC-9 CA pay about $124.xx vs. $191.xx Dec. 04 More details in the morning. Rumor of talks to add 1% pay cut to allow early retirements with no penalty. See 500+ leaving immediately with that deal.
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