Frequently Asked Questions regarding the Extension Letter of Agreement January 2, 2016

Transcription

1 Frequently Asked Questions regarding the Extension Letter of Agreement January 2, 2016 Subjects in this FAQ (click on topic) Compensation Reserve Assignment Process Improvements FRMS MOU 22 Replacement (Add Pay for duty day extensions) Furlough Restoration New Small Narrow Scope Overview Abbreviations CCO Crew Critical Off time DOS - Date of Signing FAQs - Frequently Asked Questions FRMS - Fatigue Risk Management System FSAP - Flight Safety Action Program LOA - Letter of Agreement NSNB - New Small Narrowbody PDR - Pilot Data Report TA - Tentative Agreement UPA United Pilot Agreement Compensation 1. Does this agreement contain industry leading pay rates? Answer Yes. The rates in the extension LOA are higher than the current rates for aircraft actively flown at AMR, DAL and SWA (for instance, AMR has a 747/380 rate but flies neither). The AMR 752 rate is slightly higher, but at the expense of their 763 rates our 753, 763, and 764 TA rates are substantially higher, and so is our blended TA rate. Some of the pay rates from DAL s rejected TA were slightly higher than those contained in this agreement, but the DAL deal was built upon considerable offsets to get that higher pay rate. Most notably, DAL converted a portion of their profit sharing into an additional 5.74% increase in their wages. Our agreement has no such change or conversion of profit share for higher rates. 2. Why are we only looking at DAL in the snap up? What about the other airlines? Answer It is our belief that DAL will most likely be the next airline to ratify a new agreement, as they are currently in Section 6 negotiations. The other large international carrier (AMR) recently ratified their JCBA, which has an amendable date of 1/1/2020. This provision should help to facilitate pattern bargaining. 3. How does the DAL snap up work?

2 Answer The snap up is meant to capture extra value for United s pilots should Delta ratify a new agreement in the next two years. If DAL ratifies such an agreement on or before January 1, 2018, it will trigger an analysis and potentially, an increase to our pay tables at four different times; Delta Date of Signing, January 2017 (If after Delta DOS), January 2018, and January 2019 in order to achieve the same compounded percentage gains as of January 1, How will it be determined if DAL s next deal has a higher average annual increase than this extension? Answer The analysis looks at only two items in DAL s new deal: percentage Pay Rate increases and changes to Profit Sharing, if any. The percentage increases (net of any changes to profit sharing) will be averaged across the length of their agreement and compared to our average. 5. What happens if the DAL deal has greater average annual increases than the UPA extension? Answer If this happens, then by January 1, 2019, we must match the cumulative percentage increase over the life of the UPA extension that DAL has between their DOS and 1/1/19. Snap up adjustments may be made at four different points: at DAL Date of Signing and again at January 2017, January 2018, and January There are two rules: 1. The built-in 3% raise in 2017 and 2% raise in 2018 must be maintained at a minimum and 2. If we are already above DAL at one of the adjustment points, the snap up can t put us further ahead. We have posted a downloadable spreadsheet on ExtensionLOA.org that allows you to input your own predictions of a Delta agreement to see how the snap up would work. 6. DAL pays different rates for their individual aircraft than we do. How is that accounted for? Answer The snap up looks at the percentage change in pay rates as a whole; it is not a dollar rate to dollar rate comparison between aircraft. If Delta does not give a simple across-the-board increase we accounted for that by using a weighted average of their operating fleet, similar to how a blended rate works. 7. What happens if DAL doesn t increase the rates of all of their aircraft by the same percentage? Answer A weighted average will be calculated for their entire active fleet. This would be similar to how we determine our blended rates for the Airbus, 737s, and the 757/767. Any increase to our rates will be the same percentage across the board. 8. What happens if DAL does not get a new deal before January 1 st, 2018 Answer In addition to 13% at our DOS, we will still receive the 3% increase in January 2017 and 2% increase in January 2018 as outlined in the Extension LOA. We will likely have maintained industry-leading compensation through at least 2018 or possibly until Delta reaches their deal.

3 9. What happens if DAL signs a concessionary deal, or doesn t improve upon our deal? Answer The DAL snap up provision can only make our compensation go up. If DAL s pilots ratify a deal that increases their rates the same percentage or less than ours, there will be no decrease to our compensation. 10. Will the snap up calculator be used to determine our actual snap up pay increases? Answer The calculator posted online is for demonstration purposes only. We attempted to program it to capture every conceivable scenario, but there may still be some errors. Rest assured, when it comes time to implement a Delta snap up, we will be working with an actual Delta agreement and will be able to make the calculations from there. If you would like to discuss a specific scenario you have in mind, please it to ExtensionLOA@alpa.org and we will review it and respond. 11. Why doesn t the Delta Snap Up include all the value of any potential Delta Agreement including B/C contributions, vacation pay, training pay, etc.? Answer - This provision was written to keep it simple and easily computed. Pay rates are clearly defined and easily valued. While any language can result in a dispute, we have reviewed 10 pages of examples on different snap up scenarios with the company to preclude a dispute. If a dispute were to result, the TA requires that the UPA expedited dispute procedures be used, which will ensure a fast resolution that cannot be drawn out by the company. In any case, the Company has already agreed that any decision by the System Board will include full retro. 12. Are there any changes to our profit sharing? Answer No. The Delta profit sharing structure is nearly identical to ours. Their company is just making a lot more money. If UAL was making that much, our profit sharing checks would be roughly equal to Delta pilots' checks. 13. What do we need to achieve if we delay this raise by going through typical Section 6 bargaining and a new contract comes on the current amendable date, 1, or 2 years after? Answer Attempting to answer with a percentage requires too many assumptions. What can be said is that this UPA Extension increases the average pilot s compensation by over $30,000 per year beginning on the first bid period following this LOA s Date of Signing, and this amount increases in 2017 and Any future agreements would have to be weighed against the time value of money as well as the money not captured for 2016 (the UPA amendable date is in 2017, and typically any retro achieved is calculated using the amendable date).

4 Reserve Assignment Process Improvements 1. Where are the reserve improvements? What was the Company offering/requiring with regard to reserve improvements? Answer Improvements can mean different things depending on which side of the table (management or union) is talking. The discussions about improving the reserve system were rapidly devolving into give-and-take, something that we didn t think would be successful if put before the pilot group. For that reason, we decided it was better to remove them altogether. We proposed a number of reserve improvements. The company was prepared to agree to some of them, but wanted a few things as well. One of those things was requirement for reserves to accept assignments reporting before 1000 on the first day of reserve - currently not required due to the UPA ability to check your schedule at midnight and then require 10 hours FAR rest. A few other items they wanted would have removed add pay for certain reassignments, restricted aggressive pickup of short calls, and allowed reserves to be assigned trips weeks ahead of departure for currency or consolidation. We explored some other options, but ultimately the reserve package was being weighed down with a number of items that would have been viewed as concessions. Unlike the normal Section 6 negotiating process, the Negotiating Committee was given clear direction that this deal could not contain a single concession, even if the package was viewed positively as a whole. Captain Heppner discusses this decision in this video link. We believe complicated give and take subjects like this can still be addressed in a separate LOA if the MEC authorizes such a project. FRMS 1. What is an FRMS application? Answer The Fatigue Risk Management System (FRMS see LOA 22) is an alternate means of compliance with FAR 117. When a flight is expected to exceed the FAR 117 limits (e.g., flight time or Flight Duty Period), an application for an FRMS exemption may be made so that the flight can still operate. Such relief may be granted by the FAA on a route-by-route basis as long as additional conditions and limitations (above and beyond that which exists under FAR 117) are met and the alternate means of compliance has an equivalent level of safety at that provide by FAR Have we ever used an FRMS exemption before? Answer Yes. We currently operate using an FRMS exemption on 4 different routes, such as Los Angeles to Melbourne, LAX and SFO to Sydney, and the Guam Island Hopper. Other

5 applications are pending for new service between SFO and Tel Aviv, and for existing service from EWR to Mumbai and New Delhi, and ORD and EWR to Hong Kong. 3. What did the company get from this piece of the agreement? Answer A measure of predictability for marketing s route planning. Currently Flight Operations is unable to quickly tell Network Planning if a proposed route will be acceptable to ALPA. With the TA s template, only on limited double augmented routes, they will know if they can place a flight within the template s restrictions almost immediately. ALPA is able to give its consent, because the template represents a level of safety that is greater than any FRMS that has already been approved for submission by ALPA. Further, due to the stringent rest requirements, the template has limited appeal to the company. The UPA Extension LOA also makes clear that ALPA must remain involved in all stages of the development and implementation of FRMS applications, as we are today. ALPA can withhold consent for any reason if the application seeks to raise Table B of FAR 117 beyond 14 hours or require a change to the UPA. 4. Why can t the Company use the language of LOA 22 as it exists today? Answer They can. If an FRMS application is developed and it doesn t conform to the restrictions of the template, the normal LOA 22 approval process would be required. 5. Currently, there are eleven UAL routes that either operate under an FRMS exemption or have been approved for submission to the FAA by ALPA. If this LOA s pre-approved template was in effect at the time those applications were approved, how many could have been submitted without additional ALPA input? Answer None of the existing or contemplated FRMS exempted routes would have satisfied the tighter restrictions found within this LOA s FRMS template. If those FRMS applications were made with this UPA extension in effect, the Company still would have had to craft their application with ALPA s consent prior to submitting them to the FAA. 6. Why do we only get the second break seat on FRMS flights on the bunked s? Answer The has been identified as having the worst rest facility in our double augmented fleet. Because of the volume of FSAP and PDR reports supporting our position, we were able to achieve a required second break seat on FRMS routes. The 787 has a better designed upstairs crew rest facility and the 747 has both two bunks and two rest seats. While neither the 787 nor 747 fleets have been a significant source of FSAPs or PDRs, ALPA continues to push for improvements to all existing crew rest facilities and break seats. 7. How does this affect the current routes being operated under an FRMS exemption?

6 Answer The only change to existing FRMS exempted flights will be that those currently operating with the bunked s will receive a guaranteed second break seat. Additionally, some current routes will start receiving Add Pay as a result of this agreement (See Question 4 in MOU 22 Replacement FAQ section). 8. How does this template apply to unaugmented or single-augmented flights? Answer This template only applies to double-augmented flights. Anything else would have to go through the LOA 22 process, as it exists today. 9. Are we giving the Company a blank check to obtain approval for any route they want to fly? Answer No. The template only applies to double augmented flights and allows for applications for up to an additional 60 minutes of block time and 90 minutes of FDP above the 117 limits. Additionally, if the Company wants to use the template, the application must use all of the conditions and limitations contained therein. Collectively, these are more restrictive than any of the currently operating (ALPA approved) FRMS exemptions. 10. What happens if an FRMS application does not meet one or more of the criteria? Answer The template cannot be used, and the Company will have to obtain ALPA s consent prior to submitting the application to the FAA just as they do now. Regardless of whether the template is used, the UPA Extension LOA requires that ALPA remain involved in all stages of the development and implementation of any FRMS application. 11. How does the Rest period of the FRMS template work? Answer The rest discussed in the FRMS template is FAR rest, meaning that the pilot must be free from any obligation to the company. What this means is that, in accordance with 20-Q-10, a Reserve has no obligation to answer the phone while on FRMS post-trip rest. Since this template requires 30 hours of FAR rest after such a Trip (not just a Flight), a Reserve will not be required to depart on his next Trip for at least 43 hours (30 hours post-trip rest + 13 hours for a long call to depart). 12. Can t we refuse to consent to these FRMS applications? Answer In accordance with LOA 22, Paragraph 1, we may only withhold consent based upon the merits of the application (e.g., safety reasons), unless the application seeks to raise Table B of FAR 117 beyond 14 hours or require a change to the UPA (in which case we may withhold consent for any reason. If we attempt to withhold consent for a different reason, the Company may challenge us in an expedited grievance/arbitration. 13. How does the new template affect ALPA s role in FRMS?

7 Answer - The UPA Extension LOA adds language to LOA 22 requiring ALPA s involvement in all phases of the development and implementation of FRMS applications. ALPA codified that role under the existing terms of LOA 22; the change to the language makes clear that ALPA cannot be removed in the future. 14. Does this agreement relax the augmentation rules for flights scheduled under 9 hours flight time? Answer No, the TA has no effect whatsoever on augmentation requirements. MOU 22 Replacement (Add Pay for duty day extensions) 1. Is the current ability to negotiate extension pay from LOA 30 or 5-F-1-h better than an automatic system like this? Answer No. The Company has refused to offer any extension Add Pay since April. Even if they were to change that practice and start offering add pay, it would only be on routes where the company chooses to offer it, and it would be for less than what is guaranteed in this LOA. Under the current UPA language, the triggers for receiving Add Pay are for duty day extensions of minutes (2.5 hours of Add Pay) and 75+ minutes (5 hours of Add Pay). This agreement moves the 2.5 hours of Add Pay to the first minute of extension. Anything beyond 30 minutes will receive 5 hours. For FRMS routes, the Add Pay is based off of Table C, and not the longer FRMS duty limit. Lastly, the requirement to file a Fatigue FSAP for refusals to extend 30 minutes or less has been removed. 2. Are there any changes to the duty day extension piece from the last time this was presented to the MEC? Answer Yes. The original LOA made reference to the language of 5-B-3. Since it was causing confusion, it has been removed. 3. Will this apply to Basic trips? Answer The Add Pay provisions apply to any unaugmented single leg duty day or augmented multi-leg duty day whether it is Basic or Global.

8 The UPA does not provide for extension add pay on 2-pilot duty periods containing more than one segment. In the UPA negotiations, the MEC and its committees were concerned about the concept of waiving duty limits for add pay. The MEC is undecided whether to expand this provision to two pilot duty periods containing more than one segment. 4. Will FRMS flights qualify for duty day extension Add Pay? Will I need to extend to qualify? Answer FRMS exempted flights use their own tailor-crafted limitations, and not the 117 tables. However duty day extension Add Pay, as outlined in this UPA Extension LOA, will be based upon Table C. Therefore, any FRMS flight that exceeds the applicable Table C limit will qualify for automatic Add Pay. This will occur regardless of whether or not an additional FDP extension is used in the actual operation (e.g., delayed flight). 5. How will I know if my flight has qualified for Add Pay? Answer Pilots should be aware of their original CCO before any extension is given. If you take off after that original CCO, then you will qualify for Add Pay. Also, the Company will be required to provide a receipt (via CCS, , etc.) within 72 hours of any flight that qualifies for Duty Day Extension Add Pay. The pilot can keep this receipt in case it is needed in a pay dispute. 6. If I refuse to extend my FDP by even one minute, will I have to fill out an FSAP? Answer No. Unlike how it works today, under the new TA rules, all refusals to extend one s duty day will be classified as Fitness for Duty pay events rather than Fatigue, and will not require an FSAP report to guarantee pay protection. Instead, they are treated like any other illegality. 7. Does this agreement relax the augmentation rules for flights scheduled under 9 hours flight time? Answer No, the TA has no effect whatsoever on augmentation requirements. Furlough Restoration 1. How will the retroactive payment of the Pay and Vacation longevity restoration be calculated? Answer The retro calculation ensures that pilots are credited for pay and vacation from the UPA Date of Signing until this LOA. Pay For each bid period that the pilot s longevity pay step does not match the adjusted longevity pay step, the difference between the blended rates will be multiplied by the number of hours the pilot was paid in the bid period. Vacation Determine how much more vacation the pilot would have accrued if given full longevity credit from the UPA s date of signing of December 2012 through April Then, apply the appropriate blended pay rate towards the value of those days.

9 2. What happens going forward? Pay Affected pilots will begin using their adjusted pay longevity beginning with the second bid period following this LOA s date of signing. Vacation Affected pilots will begin accruing with their adjusted vacation longevity for all days that they accrue beginning in May 2016 (i.e., days to be bid in the vacation year). 3. Does the furlough language favor one legacy over the other? Answer No. The furlough longevity restoration language treats all furloughed pilots, regardless of legacy, as if they had received full longevity credit for pay and vacation at the Date of Signing of the UPA. While legacy UAL furloughed pilots will see a greater benefit from the pay restoration language, legacy CAL furloughed pilots will benefit from the vacation credit (and most L-CAL furloughed pilots will receive some pay restoration, as well). 4. Why won t my retroactive payment be the same as others? Answer Every pilot s circumstance is different, whether he/she is due for a pay or vacation longevity adjustment, based both on the amount of furlough time that is being restored and how many hours/vacation days the pilot is being paid for. 5. How will vacation be handled? Answer For pilots who end up with increases to their annual vacation allotment, the new accruals will take effect in May 2016 for the vacation year. Extra vacation days for the vacation year will be paid in advance in the retro payment. 6. Will I receive any retroactive payments for time before the UPA date of signing? Answer The retroactive payment only goes back to the UPA effective date (Dec 2012 Bid Period). 7. Why isn t longevity for pass travel included in this agreement? Answer The MEC Officers have been attempting to address disparities in pass travel policy since the current program was implemented. The history of pass travel is hugely inconsistent, but what is consistent is that neither subsidiary pilot collective bargaining agreement had any language defining how a pilot s boarding date would be calculated. Such a definition would affect other employee groups, and we have been historically unsuccessful including this topic in contract negotiations. Establishing that definition was not part of the direction provided for this TA, but perseveres as a priority for the MEC going forward. 8. When will the Company make the payments?

10 Answer The Company shall make the retro payments within 120 days of the date of signing of this LOA. NSNB 1. Why is there no mention of the New Small Narrowbody (NSNB) in this agreement? Answer Our belief was that formally including it in these discussions could give the appearance that we are paying for these new aircraft. Instead, the market has been driving the Company toward a NSNB order for some time. MEC Chairman Jay Heppner addressed the NSNB issue in the first video on the Extension LOA website. The other thing you will not see in this Tentative Agreement is the mention of New Small Narrowbody aircraft. I believe it is important that we physically have 100 seat aircraft on the United property flown by United pilots on the United seniority list so we never have to negotiate that provision again. But the mention of New Small Narrowbodies in the McKeen letter caused much unnecessary consternation about suspected scope relief and the dangling of shiny airplanes to entice the United Pilots into a deal. So, to remove any doubt about the company s present and ongoing ability to order 100 seat aircraft, we struck any language about any potential order from these negotiations. Scope Here is the link to the Extension LOA website to access that video, and the other videos explaining the LOA: 2. Has the Company committed to making a NSNB order and, if so, what kind of airplanes would it be? Answer As you have likely read, the Company has publicly stated that they are pursuing such an order; however, that order is not contingent on the ratification of the UPA Extension LOA. We have no information about what aircraft the Company would order when it decides to place such an order. 1. Did we make any concession to Section 1 (Scope)?

11 Answer No. 2. But the Embraer s E2 series is included in the pay table. Aren t we allowing those larger aircraft to count as New Small Narrowbody aircraft for scope purposes? Answer This TA does not specify that an E2 series is a New Small Narrow Body aircraft. Many different aircraft are paid the same rate (e.g., 747, 787, 777, and ). A position on a pay table does not affect a potential argument with respect to scope. Additionally, negotiations would have to occur with the Company with respect to where the aircraft falls in UPA Section 8 s Classification of Categories. 3. Are there any changes to Section 1? Answer Yes. The UPA has furlough protections applying to all pilots that were employed at the Date of Signing (December 18, 2012). This extension resets that date to the DOS of this LOA to include the approximately 1,500 additional pilots that have been hired since that time. Specifically, the penalty requires the company to physically convert 76 seat aircraft to 70 seats it is not avoidable because of conditions beyond the company s control (force majeure). Overview 1. How much is this extension worth? Answer The extension adds an average of $375 million in additional compensation per year over the next three years in just pay increases alone. This value is above and beyond the 3% raises already included in the UPA. On top of this are the furlough retro payments, automatic extension look back pay, second break seat on FRMS 777 flights, and any additional value that the Delta snap up may provide. 2. What is the Company gaining from this deal? Answer Mostly, the company gets a two year extension to the UPA. This does not mean that ALPA doesn't continue to pursue complete implementation of the current agreement, nor does it mean that improvements aren't possible during the remaining term of the UPA. Since UPA DOS in 2012, multiple beneficial MOUs and LOAs have been reached, and that process will continue. The company gets a 2 year extension - a period where they can focus on improving operational issues under a new CEO rather than bargaining a new pilot contract. They also gained some predictability for certain FRMS routes, where on some routes they can know in advance that ALPA will approve the FRMS application. The template is not terribly attractive to the company because it contains stringent rest requirements. So they are better off dealing with ALPA on a

12 case by case basis, but this does provide them some certainty if they are willing to live with the rest requirements. Please look for more information here. 3. If we accept this extension, are we going to have any other opportunities to make improvements to the UPA before January 2019? Answer The contract is a living, breathing document that is continually evolving through Letters of Agreement, Memorandums of Understanding, and grievance awards and settlements. This extension negotiation was unthinkable just a year ago. It is quite common for the Parties to discuss contractual changes outside the Section 6 process. For example, there have been 24 LOAs and MOUs reached since the UPA was signed.