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US Airways MEC Fact Sheet I

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US Airways MEC Fact Sheet
Restructuring Negotiations – Tentative Agreement Summary
July 15, 2002


The following summary highlights management’s final proposal for the ALPA – US Airways restructuring tentative agreement. The US Airways MEC accepted the final proposal on July 13, 2002, and has submitted this final proposal to the membership for your consideration and vote.



The tentative agreement, with the exception of the international and domestic code-sharing authority provisions, is subject to membership ratification. The MEC ratified the international and domestic code-sharing components of the tentative agreement to allow US Airways the ability to expedite entering into domestic and international code sharing agreements. The MEC also received and ratified an interim bankruptcy protection letter that provides bankruptcy protections for our current agreement prior to the tentative agreement becoming ratified in order to cover the membership ratification period up to August 9, 2002.



DURATION



Duration would be from July 1, 2002, to December 31, 2008. The parties will commence bargaining for a new collective bargaining agreement no later than January 15, 2008, and will make every reasonable effort to complete such bargaining in time to secure a new, fully ratified, collective bargaining agreement prior to the amendable date. If the parties have not reached a tentative agreement by August 1, 2008, they will, no later than August 10, 2008, jointly apply for mediation with the National Mediation Board.
· The ALPA Restructuring Agreement will be contingent on the completion of the following business conditions at the option of the Association:

Ø The ATSB has committed to a loan facility for the Company sufficient to enable the Company to restructure on an out-of-court basis (note: this can be waived by ALPA if the Company obtains financing for bankruptcy restructuring instead of out-of-court).

Ø The Company’s other labor groups, management and salaried personnel, aircraft lessors, vendors, and other creditors have agreed to meaningful participation in the Restructuring Program satisfactory to the Association.



PAY RATES

On the effective date (July 1, 2002) of the restructuring agreement (if ratified), the hourly pay rates that were in effect on June 30, 2002, would each be reduced to the rates that were in effect on September 1, 1999. These are the pay rates prior to the parity adjustments on May 1, 2001, of plus 16.99 percent and May 1, 2002, of plus 16.073 percent, and with respect to the A330, prior to the parity increases provided by LOA 65.
· Hourly pay rates will be increased by a compounded 1% effective on May 1, 2003, May 1, 2004, May 1, 2005, and May 1, 2006, and further increased by a compounded 2% effective on May 1, 2007, May 1, 2008 and 3% on May 1 of any succeeding status quo period. (The Agreement term would include any status quo period.)

Narrowbody aircraft, which would include the B-737-3/400, the Airbus 320 family (318/319/320/321), the DC-9, the MD-80, and the B-717 and B-727 will be paid at Group 2 rates.
The one percent lump sum payment, scheduled for 2003, will not occur.
The parity review scheduled for May 1, 2003, and Letter of Agreement 47, as amended, will be canceled.
Rates of pay would snap back to the June 30, 2002, rates on a Change in Control of US Airways as defined in Section 1D(2) of the Agreement.
SCOPE

· Current no-furlough clause would be eliminated.

· No-furlough protection would be established through a minimum fleet size of no less than 275 aircraft and no less than 245 aircraft in the event of Chapter 11 bankruptcy.

· Minimum block hours would be no fewer than 934,400 per year, and in the event of Chapter 11 bankruptcy, 832,200 per year. For the period of July 1, 2002, through December 31, 2002, the minimum block hours are 471,040 and in Chapter 11, 419,520. Furlough deferrals may occur from permanent bid results from mainline pilots bidding MDA vacancies (see Jets for Jobs provisions).

· Protections against furlough as a result of any productivity improvements that may be agreed to. (Note: Other than certain changes that may take place for a limited time in bankruptcy, there is no obligation to agree on further productivity changes.)
 
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