APFA

Throughout the restructuring process, our goal has remained to reach a consensual agreement with APFA that increases productivity and allows us to compete successfully.

 

We now have Court approval to implement the ratified agreement reached with APFA, representing approximately 17,000 employees. Once all changes have been implemented, American will have improved productivity and fewer inefficiencies and operational barriers, while still protecting as much as possible the earning potential of our flight attendants.

 

All Employee Restructuring Objectives

• Reduce employee costs
• Our approach to employee savings is focused on preserving base pay rates as much as possible by increasing productivity
• Implement universal changes to active and retiree medical for current employees (effective 2013 open enrollment)
• Remove and relax restrictions on our business
• Remove structural barriers that limit flexibility and ultimately growth
• Replace pension benefit with a Defined Contribution Benefit (effective Nov. 1)
• Implement new first-dollar profit sharing plan (effective Sept. 12)
  

 

Overview of Flight Attendant Implementation Schedule

• Annual cost savings: 17 percent of flight attendants' total costs
• Provides a Voluntary Early Out Program for eligible flight attendants (Election window open from 8/27/12 – 9/20/12)
• Date of signing lump sum payment (effective Sept. 21)
• Increases base pay rates (effective Oct. 1)
• Single base rate for Domestic and International (effective Oct. 1)
• Increases per diem pay (effective  Oct. 1)
• Pays PVDs  at a daily rate (effective Oct. 1)
• Increases flight attendant schedule max to align with other carriers (effective Nov. 1)
• Increases the annual threshold for benefits eligibility from 420 hours to 600 hours (effective Jan. 1, 2013)
• Modifies the sick leave policy (estimated between 1Q2013-2Q2013)
• Implements a Preferential Bidding System (PBS) to improve scheduling (likely effective 4Q2013 – 1Q2014)
• Combines International and Domestic operations (effective upon implementation of PBS)
• Pay Protect flight attendants for lost trips due to cancellations (effective upon implementation of PBS)
• Pays all vacation at a daily rate (effective upon implementation of PBS)
• Changes the way we manage the Reserve system for new hires (estimated between 4Q2013-1Q2014)

 

Rationale

• We worked hard to preserve and actually increase flight attendant base pay rates by focusing our strategic cost savings efforts on productivity in the new agreement, like increasing the monthly max, combining our Domestic and International operations and moving to a Preferential Bidding System.
• The Voluntary Early Out Program provides eligible flight attendants with 15 years Company seniority $40,000 upon separation.