Joint Negotiations

Timeline and Updates

A quick summary of major and noteworthy events since the start of negotiations.

View 2009 Updates   |    View 2008 Updates   |    View 2007 Updates

August 24, 2010

American is very pleased the TWU-represented Maintenance Control Technicians (Technical Specialists) ratified their contract. These employees will realize immediate financial gains, along with more vacation days, holidays and sick time.

 

Since we started negotiations with all of our workgroups, our objective has been clear: Position the company to compete successfully for the long-term and provide competitive pay and benefits, and a good career for our employees.

 

While the Mechanic & Related and Stores agreements were not approved, we expect to continue working toward new agreements and will look to the National Mediation Board for guidance on next steps with these workgroups. American felt the tentative agreements reached with both groups represented the company’s best offer and demonstrate we can reach agreements with the TWU. That’s important to remember because we’re not at a point in negotiations where a strike could occur. Only the NMB can release the parties, which typically only happens after it’s clear a deal cannot be reached. We look forward to re-working the agreements in a balanced way that will achieve ratification.

To view the Maintenance Control Technician full-text language, click here.

July 7, 2010

American and the Transport Workers Union have finalized the language for the Material Logistics Specialist (Stores) tentative agreement, as well as question & answer documents related to the TA reached.

To view the full-text language, click here.

To view the Material Logistics Specialist (Stores) question & answer document, click here.

To view the Retiree Medical question & answer document, click here.

May 28, 2010

American Airlines and the Transport Workers Union have reached a tentative agreement in principle for the Fleet Service workgroup.

This tentative agreement provides our Fleet Service Clerks with market-based compensation, including structural increases, and enhancements to other contract items such as vacation, holidays and sick leave. It also provides American with an opportunity to improve its productivity and efficiency.

Both parties worked collaboratively during the negotiating process, and American believes the tentative agreement addresses the interests of both our TWU-represented employees and the company.

American Airlines has more than 50,000 employees represented by unions, including approximately 10,600 under this tentative agreement.

Key highlights of the agreement are below.  Click here for the full tentative agreement.


Compensation

  • Signing bonus of 3% lump sum on date of signing
  • 3% structural increase effective date of tentative agreement
  • 1.5% structural increase 12 months after date of signing
  • 1.5% structural increase 24 months after date of signing

Profit Sharing: Replace the current financial component of the AIP plan with an uncapped annual profit sharing plan that rewards employees at the first dollar of pre-tax earnings, excluding special, unusual and non-recurring items. This matches the richest plan in the industry.

Scope
  • Outsource fueling as follows:
    • At New York LaGuardia (only station where Title III employees perform this function) as of date of signing.
    • At locations where Title IV Ground Service employees perform this function only after these employees have left the station through retirement or otherwise:
  •               BNA                    BOS                    DTW                   ELP                    LAX
  •               ORD                   PHX                    SAN                    SFO                    TULE
  • Outsource bus drivers at Los Angeles and Chicago O’Hare.
  • Establish a new Dayline Cabin Clerk classification within the Fleet Service agreement that will perform this function at the following stations:
  •              BOS                    DFW                    JFK                     LAX                    
  •              LGA                     MIA                     ORD                    SFO

              The new classification will be paid between $7.25 and $10.00 per hour.

  • At these stations, American commits to not furlough until 863 Fleet Service Clerk employees have separated from the company (to include employees taking the voluntary separation package).
  • The Fleet Service Clerks currently conducting the dayline cabin cleaning functions will remain in the Fleet Service Clerk classification and will be able to bid into other Fleet Service Clerk positions and shifts in accordance with an implementation plan.
  • One-time voluntary separation offer for all Title III employees at the eight locations identified above and for all Title IV employees in the system:
  • For employees who retire from AA prior to January 1, 2011 OR resign from AA under the 50/55 rule by January 1, 2011:
    • Lump sums paid in 2010 would be considered pensionable earnings when determining pension benefit.
    • Retiree will keep current retiree medical benefits.
    • A special voluntary separation allowance of $25,000.
  • For employees who resign from AA and forfeit any recall rights by January 1, 2011:
    • A special voluntary separation allowance of $25,000.

Shift Differential (tentative agreement reached March 7, 2010): Current book

Overtime (tentative agreement reached March 7, 2010): Vacation will be considered as time worked for overtime purposes.

Holidays (tentative agreement reached March 7, 2010):

  • Increase total number of holidays from 5 to 8 days over two years by adding the following:
    • Memorial Day –effective 2010
    • Day after Thanksgiving
    • Martin Luther King, Jr. Day
  • Increase holiday work rate of pay from one and a half times to double time on date of signing.

Vacation (tentative agreement reached March 7, 2010): Provide 1 “personal day,” effective date of signing. Employees may receive pay in lieu of taking the day, to be paid by January 31 of the following year.

Sick Leave: Increase the sick leave accrual rate to 8 days per year, effective January 1, 2011. Increase maximum accumulation of sick time from 180 days to 250 days for Fleet Service and 150 days to 250 days for Ground Service. This proposal was made in conjunction with the Retiree Medical proposal.

Retirement Benefits: Provide a defined contribution 401(k) plan for new hires, better aligning American with what is standard in the industry.

  • After one year of eligible service, new hires would receive an automatic 2.5% company contribution to the $uper $aver Plus 401(k) plan, based on qualified pensionable earnings with no employee contribution required.
  • After one year of eligible service, the company will also give a 100% match for employee contributions up to a maximum of 3%, for a total maximum company contribution of 5.5%.
  • Current employees will have a one-time option to change from the defined benefit pension plan to the $uper $aver Plus 401(k) plan and receive the automatic contribution and company match described above. Current employees’ pension credited service and pay growth would be frozen.

Retiree Medical: American’s proposal guarantees access to retiree medical coverage, regardless of employee health status – both before and after age 65 – but modifies the funding of those programs to better align American with the industry and corporate America.

  • Current Retirees: No changes to plans for current retirees.
  • Current Employees 50 or older as of 12/31/2010 (with either 120 months prefunding or who opted into prefunding when first eligible): No changes to current plans.
  • Current Employees 49 or Younger as of 12/31/2010:
    • Pre-65: Employees may fund Pre-65 retiree medical coverage with sick bank hours at a rate of 20 hours per month of coverage for themselves and all eligible dependents. Employee pre-funding does not apply and the Sick Leave article will be amended to accrue a maximum of 8 days per year and to change the maximum accrual to 250 days. If a retiree’s sick bank is insufficient to provide medical coverage until the retiree turns 65, once the sick bank is depleted, the retiree will pay monthly premiums at the same rate as other groups that are post-funding for retiree medical coverage at that time (which today is $110 per person per month).
    • This includes medical coverage for spouse and dependent children until the employee is or would have been 65, if the spouse is covered as an eligible dependent at the time of retirement or death of the retiree. Spouse and dependent children are covered until the spouse becomes turns 65.
    • Post-65: Retirees will have access to a guaranteed issue Medicare supplement plan with no company subsidy.
    • Employer prefunding contributions will cease at date of signing.
  • The Company and TWU established rollover options for employee prefunding balances.
    • For employees who are under age 45 as of 12/31/2010, they will have the option to roll the prefunding refund into a JP Morgan after-tax 401(k), or take a cash payout. 
    • Employees between the ages of 45-49 as of 12/31/10 will have the same options to roll into a 401(k) or take a cash payout. Or they can choose to not receive a prefunding refund and instead have more sick leave credits added to their existing sick leave bank at the time of retirement, to be used for retiree medical only. The credits will be given as follows:

    •  

      Age 49 as of 12/31/10:                    840 hours of sick leave credits

      Age 48 as of 12/31/10:                    720 hours of sick leave credits

      Age 47 as of 12/31/10:                    630 hours of sick leave credits

      Age 46 as of 12/31/10:                    540 hours of sick leave credits

      Age 45 as of 12/31/10:                    480 hours of sick leave credits

      The sick leave credit conversion is subject to legal and tax review. The deadline date for choosing which option you want to select will be determined soon.
    • At the time of retirement, the company will look back at the employee’s record since payroll since 5/5/2010, and if there are any occurrences of illness or injury that used 45 or more consecutive days of sick time, the company will replenish those sick days, which then can be used toward your sick conversion for retiree medical coverage
  • In order to comply with federal tax laws, eliminate the provision providing a $25 per-sick-day payout upon retirement.
  • The plan design will be the same as management and support staff, which includes preventive care in-network.
  • Increase medical life-time maximum from $300,000 to $500,000
  • New Hires
    • Pre-65: New hires may fund Pre-65 retiree medical coverage with sick bank hours at a rate of 20 hours per month of coverage for themselves and all eligible dependents. Employee pre-funding does not apply and the Sick Leave article will be amended to accrue a maximum of 8 days per year and to change the maximum accrual to 250 days. If a retiree’s sick bank is insufficient to provide medical coverage until the retiree turns 65, once the sick bank is depleted, the retiree will pay monthly premiums, actuarially based on family status and age bands at the retiree’s expense.
    • Post-65: Retirees will have access to a guaranteed issue Medicare supplement plan with no company subsidy.
Eagle ASM Cap: The current Eagle ASM Letter restricts American’s ability to compete with other legacy carriers and their regional partners because of the number of American Eagle/American Connection available seat miles (ASMs) American can fly relative to the American Airlines ASMs across the network.

The tentative agreement gives us the flexibility to effectively utilize the 22 CRJ-70s that we have on order and  modifies the cap from 6% to 10% with the current counting methodology, but excludes the following additional markets from the ASM Cap:
  • BNA, RDU, SJC, STL Eagle routing
  • Eagle pre-1993 ASMs
  • Markets in which AA and AE both fly

Upon modification or elimination of this letter in each of the 6 AA/TWU labor agreements, Article 42- Job Security will be amended to provide a new system job protection date of 6/6/2000. This affects approximately 1,000 employees.

Duration of Agreement: Establish the duration of agreement as 36 months from the date of signing, with an option for either party to open the agreement six months prior to the amendable date.

 

May 6, 2010

American Airlines and the Transport Workers Union have reached a tentative agreement in principle for the Material Logistics Specialist workgroup, formerly known as the Stores workgroup.

Similar to the tentative agreement reached with the Mechanic & Related workgroup earlier this week, this tentative agreement provides our Material Logistics Specialists with market-based compensation, including structural increases, and enhancements to other contract items such as vacation, holidays and sick leave. It also provides American additional flexibility in its maintenance operation.

Both parties worked collaboratively during this negotiating process to reach a tentative agreement that addresses the interests of our TWU-represented employees and the company.

It is our understanding the TWU is recommending the ratification of the tentative agreement and will provide details regarding its terms and the ratification process to their members in the coming days.

American Airlines has more than 50,000 employees represented by unions, including approximately 1,200 under this tentative agreement.

April 14, 2010

American is pleased the National Mediation Board has called for the parties to reconvene, while it continues to consider the requests from the union and the company. American's negotiating teams remain focused and are ready to get back to work at the table once the NMB sets dates to reconvene the parties.

April 2, 2010

American and the Transport Workers Union continued mediated negotiations with the Simulator Technician and Ground School Instructor workgroups with Mediator Terri Brown this week.

On Wednesday, American presented comprehensive proposals to both workgroups. The proposals aimed to address the union’s desire for more fixed compensation instead of variable pay.

The TWU chose to deliberate and did not formally respond during the session, but the parties remain close on all items except compensation and duration of the agreement. As a reminder, these two workgroups have already reached tentative agreements on pension and retiree medical.

We look forward to the mediator establishing the next steps and to continuing negotiations at a later date.

Details of the company’s latest proposals are below. To see the full Simulator Technician proposal, click here. To see the full Ground School Instructor proposal, click here.
  • Simulator Technician Compensation:
    • Signing bonus of 3% lump sum on date of signing.
    • 1% structural increase 12 months after date of signing.
    • 2% lump sum increase 24 months after date of signing.
    • Premium pay including:
      • Lead Simulator Technician pay: $2.00/hour, effective date of signing.
      • Part 60 Compliance pay (Skill Premium): Increase from $0.10/hour to $1.10/hour, effective date of signing.
  • Ground School Instructor Compensation:
    • Signing bonus of 3.5% lump sum on date of signing.
    • 1% structural increase 12 months after date of signing.
    • 1.5% lump sum increase 24 months after date of signing.
    • Premium pay including:
      • International/General Subjects Instructor : $115/month, effective date of signing.
      • Simulator Pilot Instructor: Increase from $10/month to $126/month, effective date of signing.
      • Ground School Instructor: Increase from $10/month to $94/month, effective date of signing.
      • Standardization Coordinator: Increase from $150/month to $200/month, effective date of signing.
      • Work Unit Experience Pay: Increase from $10/month to $50/month, effective date of signing.
  • Profit Sharing: Replace the current financial component of the AIP plan with an uncapped annual profit sharing plan that rewards employees at the first dollar of pre-tax earnings. American’s proposal matches the richest plan in the industry but was modified to match the revised Continental plan.
  • Holidays: Increase holiday work rate of pay from one and a half times to double time on date of signing.
  • Duration of Agreement: Establish the duration of the agreement as four years from date of signing, with an option for either party to open the agreement six months prior to the amendable date.

March 10, 2010

American Airlines and the Transport Workers Union continued mediated negotiations in Washington, D.C. this week, beginning Saturday, March 6 and concluding on Wednesday, March 10.

Throughout the course of the week, the teams worked collaboratively and made progress on several issues, reaching tentative agreements on six outstanding articles: Article 5- Shift Differential, Article 6- Overtime, Article 7- Holiday, Article 8- Vacation, Article 42- Job Security and Article 43- Part Time. This brings the total contract articles agreed upon to 87%, with only six open articles remaining.

On Wednesday, the teams exchanged comprehensive proposals in an attempt to close the gaps on the large remaining items.  While both parties made significant moves toward each other on compensation and pension, we remain far apart in the areas the company needs to improve its competitive position – outsourcing dayline cabin cleaning, retiree medical and the ASM cap. 

The company recognizes the desires of our TWU-represented employees to quickly realize financial gains and the company’s current proposal would provide more than $3,100 to full-time employees within the first six months of the agreement.  This is in addition to increases in the total number of vacation, holiday and sick days provided annually.

While the teams did not reach an agreement during this session, the company remains committed to the process, and we are ready to move ahead with any proposal that makes good economic and operational sense.  We look forward to resuming mediated discussions with the TWU Fleet negotiating committee and anticipate that mediator Terri Brown will set additional dates tomorrow, March 11. 

Details of the company’s latest proposal are below.  To see the full proposal, click here.
  • Compensation:
    • Signing bonus of 4% on date of signing.
    • 3% lump sum increase 6 months after date of signing.
    • 2.5% structural increase 18 months after date of signing.
    • 3% lump sum increase 30 months after date of signing, convertible in whole or in part to a structural increase to keep American’s relative standing in the industry for the Fleet Service maximum hourly rate.
    • A full-time Fleet Service Clerk at max rate would get approximately $4,496 in lumps sums throughout the life of the agreement (including approximately $3,124 in the first 6 months) and the max hourly chart rate would increase to $21.69 in 2011.
    •  A part-time Fleet Service Clerk at max rate would get approximately $2,249 in lumps sums throughout the life of the agreement (including approximately $1,563 in the first 6 months) and the max hourly chart rate would increase to $21.69 in 2011. 
    • Increase Crew Chief override premium from $1.50 to $1.75 per hour.
  • Scope: Outsource dayline cabin cleaning at all domestic locations. To provide complete transparency, American will not furlough from the following stations until 863 Fleet Service Clerk employees have separated from the company (to include employees electing to take the voluntary separation program):
    • BOS
    • LAX
    • ORD
    • DFW
    • MIA
    • SFO
    • JFK
    • One-Time Voluntary Separation Program will provide the following options:
      • For employees who retire from AA prior to January 1, 2011 OR resign from AA under the 50/55 rule by January 1, 2011:
        • Lump sums paid in 2010 would be considered pensionable earnings when determining pension benefit.
        • Retiree will keep current retiree medical benefits.
        • A special voluntary separation allowance of $25,000.
      • For employees who resign from AA and forfeit any recall rights prior to January 1, 2011:
        • A special voluntary separation allowance of $25,000.
  • Shift Differential: Current book. (Reached tentative agreement.)
  • Overtime: Vacation will be considered as time worked for overtime purposes. (Reached tentative agreement.)
  • Holidays: (Reached tentative agreement.)
    • Increase total number of holidays from 5 to 8 days over two years: 
      • Increase from to 5 to 7 in 2010 (Memorial Day and the day after Thanksgiving) This assumes ratification prior to Memorial Day 2010. 
      • Increase from 7 to 8 in 2011 (Memorial Day, the day after Thanksgiving and Martin Luther King Day).
    • Increase holiday work rate of pay from one and a half times to double time on date of signing.
  • Vacation: Provide one “personal day” effective date of signing. Employees may receive pay in lieu of taking the day, to be paid by January 31 of the following year. (Reached tentative agreement.)
  • Sick Leave: Increase the sick leave accrual rate to 8 days per year, effective January 1, 2011. Increase maximum accumulation of sick time from 180 days to 210 days for Fleet Service and 150 days to 210 days for Ground Service. This proposal was made in conjunction with the Retiree Medical proposal.
  • Retirement Benefits: Provide a defined contribution 401(k) plan for new hires, better aligning American with what is standard in the industry. Only one AA competitor currently offers a defined benefit plan while others have terminated or frozen their plans.
    • After one year of eligible service, new hires would receive an automatic 1% company contribution to the $uper $aver Plus 401(k) plan, based on qualified pensionable earnings with no employee contribution required.
    • After one year of eligible service, the company will also give a 100% match for employee contributions up to a maximum of 4.5%, for a total maximum company contribution up 5.5%.
    • Current employees will have a one-time option to change from the defined benefit pension plan to the $uper $aver Plus 401(k) plan.
  • Retiree Medical: American’s proposal guarantees access to retiree medical coverage, regardless of employee health status – both before and after age 65 – but modifies the funding of those programs to better align American with the industry and corporate America.
    • Current Retirees – Make no changes to plans for current retirees. The changes outlined below would begin for retirements on or after 1/1/2011.
      • Company pre-funding contributions will stop at date of signing.
    • Current Employee Pre-65 – American proposed two options for current employees, available at the time of retirement:
      • Retirees will make monthly retiree medical payments to cover a portion of the cost. The company's proposal is that employees will pay the same portion of costs that management pays, which today is 25 percent but could change in the future. Today American retirees who are making monthly payments for pre-65 coverage pay between $110 and $140 per month per person.

       OR

      • Retirees can fund Pre-65 retiree medical coverage with sick bank hours at a rate of 20 hours per month for coverage for themselves and all eligible dependents. Employee prefunding will not apply and the Sick Leave article will be amended to accrue a maximum of 8 days per year and to change the maximum accrual to 210 days. If a retiree’s sick bank is insufficient to provide medical coverage until the retiree turns 65, the retiree may pay premiums to maintain retiree medical coverage, actuarially based on family status and age bands. TWU will have ability to review and validate plan every 2 years and the company will evaluate the sick hour to medical cost ratio every 2 years and adjust the sick hours required for one month of medical coverage in accordance for future retirements.
    • Current Employee Post-65 – At age 65, retirees will receive access to a series of Medicare supplement plans offered by UnitedHealthcare. The plans will be "guaranteed issue" meaning any employee will be eligible, regardless of medical history or condition. The employee will pay 100% of the premiums for the Medicare supplement coverage. For 2010, the national average monthly payment for Medicare supplement coverage ranges from $81 to $183 per person depending on the plan and coverage level selected.
    • The company and union will establish a joint committee to explore rollover options for employee prefunding balances. Absent an agreement on alternative rollover options by 12/31/2010, active prefunding balances will be refunded by 6/30/2011.
    • Under both options, plan design will be the same as management, which includes preventive care in network.
    • Increase medical maximum from $300,000 to $500,000.
    • New Hires – Pre-65 retirees will have access to retiree medical coverage with no company subsidy. The new hire will pay the full contribution. Post-65 retiree coverage will be replaced by a guaranteed issue, employee paid Medicare supplement plan.
  • Profit Sharing: Replace the current financial component of the AIP plan with an uncapped annual profit sharing plan rewarding employees at the first dollar of pre-tax earnings and matching Continental’s plan, which is the richest plan in the industry.
  • Eagle ASM Cap: The current Eagle ASM Letter restricts American’s ability to compete with other legacy carriers and their regional partners because of the number of American Eagle/American Connection available seat miles (ASMs) American can fly relative to the American Airlines ASMs across the network.

    American would like to have the flexibility to increase its number of regional ASMs to optimize our network. The company proposes modifying the cap from 6% to 10% with the current counting methodology, but excluding the following additional markets from the ASM Cap:
    • CID-ORD
    • BNA, RDU, SJC, STL Eagle routing
    • Eagle pre-1993 ASMs
    • Markets in which AA and AE both fly

Upon modification or elimination of this letter in each of the 6 AA/TWU labor agreements, Article 42- Job Security will be amended to provide a new system job protection date of 6/6/2000.

  • Miscellaneous: The parties committed to continuing the Working Together process by including language in the contract. (Reached tentative agreement.)

February 22-25, 2010

This week the American Airlines and Transport Workers Union Stock Clerk negotiating committees continued negotiations in Tulsa, Okla. with Mediator Jack Kane.

On Tuesday, American provided the TWU a full-text comprehensive proposal. The company’s proposal aimed to address the current state of both the airline and the industry while also addressing many of the union’s interests.

While the company modified its previous proposal in areas such as sick leave and vacation, it did so in order to provide improvements elsewhere in the proposal, like the additional lump sums and the option to convert lump sums to structural increases to maintain American’s relative standing. It is not unusual during collective bargaining, especially when using the comprehensive proposal approach, to have specific areas change from proposal to proposal. These changes were aimed at recognizing the desires of our TWU-represented employees while also allowing American to better manage its labor unit cost and be competitive. 

We look forward to continuing negotiations with the TWU at a later date to be determined and scheduled by Mediator Kane.

American’s comprehensive proposal includes:

  • Compensation:
    • Provide lump sums each of the four years of the contract for an aggregate of 10 percent over the four years, beginning date of signing.
    • A full-time Stock Clerk at max rate would get approximately $4,584 in lumps sums throughout the life of the agreement, with the option for up to 7 percent to be convertible to structural increases.
    • A full-time Crew Chief Stock Clerk at max rate would get approximately $4,828 in lump sums throughout the life of the agreement, with the option for up to 7 percent to be convertible to structural increases.
    • The lump sums are convertible in whole or in part to structural increases to keep American’s relative standing compared to the industry for the maximum hourly rate.
  • Workrules:
    • Improve American’s ability to compete by providing relief from the 1/7 rule at the overhaul bases. Currently only 1/7 of a workgroup can work a weekend coverage shift. This proposal would provide management with greater flexibility to schedule employees based on workload and customer demands.
    • Base Labor Loan Workrules: Modify in order to allow management to assign employees within a business work unit to other positions in order to improve efficiency and meet workload demand.
  • Holidays: Increase total number of holidays from five to eight by the second year of the contract. Increase holiday work rate of pay from one and a half times to double time on date of signing. This brings American in line with the industry average.
  • Vacation: Increase the accrual rate for employees with less than five years to 80 hours of vacation a year, or two weeks.  This will give all employees with less than ten years the ability to accrue up to 80 hours, or two weeks.
  • Sick Leave: Modify the accrual rate to increase to eight days per year during the life of the agreement.
  • Retirement Benefits: Provide a defined contribution 401(k) plan for new hires, better aligning American with what is standard in the industry. Only one AA competitor currently offers a defined benefit plan while others have terminated or frozen their plans. New hires would be automatically enrolled in the $uper $aver Plus 401(k) plan to include a 100 percent company match for employee contributions up to 5.5 percent. Existing employees would have the option of moving to the defined contribution 401(k) plan or staying in the current defined benefit pension plan.
  • Retiree Medical: American’s proposal guarantees access to retiree medical coverage, regardless of employee health status – both before and after age 65 – but modifies the funding of those programs to better align American with the industry and corporate America.
    • Current Retirees – Make no changes to plans for current retirees. The changes outlined below would begin for retirements on or after 1/1/2011.
    • Current employees will have pre-funding balances refunded and company pre-funding contributions will stop at date of signing.
    • Current Employee Pre-65 – Retirees will make monthly retiree medical payments to cover a portion of the cost. The company's proposal is that employees will pay the same portion of costs that management pays, which today is 25 percent but could change over time. Today American retirees who are making monthly payments for pre-65 coverage pay between $110 and $140 per month per person.
    • Current Employee Post-65 – At age 65, retirees will receive access to a series of Medicare supplement plans offered by UnitedHealthcare. The plans will be "guaranteed issue" meaning any employee will be eligible, regardless of medical history or condition. The employee will pay 100 percent of the premiums for the Medicare supplement coverage. For 2010, the national average monthly payment for Medicare supplement coverage ranges from $81 to $183 per person depending on the plan and coverage level selected.
    • Terms of Retiree Medical will be as good as or better than the retiree medical plan design, eligibility and contributions offered to management.
    • New Hires – Pre-65 retirees will have access to retiree medical coverage with no company subsidy. The new hire will pay the full contribution. Post-65 retiree coverage will be replaced by a guaranteed issue, employee paid Medicare supplement plan.
  • Profit Sharing: Replace the current financial component of the AIP plan with an uncapped annual profit sharing plan rewarding employees at the first dollar earned and matches what was the richest plan in the industry.
  • Eagle ASM Cap: The current Eagle ASM Letter restricts American’s ability to compete with other legacy carriers and their regional partners because of the number of American Eagle/American Connection available seat miles (ASMs) American can fly relative to the American Airlines ASMs across the network.

    American would like to have the flexibility to increase its number of regional ASMs to optimize our network. The company proposes modifying the cap to not exceed the industry average (based on CO, DL, UA and US with their regional partners), which currently stands at 21.3%.

To view the company's comprehensive proposal, click here.

February 5, 2010

This week the American Airlines and Transport Workers Union Fleet negotiating committees continued mediation at Flagship University (FSU), Fort Worth, TX.

During the course of the week, American offered the TWU two (2) comprehensive proposals – one was made Tuesday and one was made as a counter to the union’s proposal on Thursday.

American’s proposals aimed to address the interests of both parties and position the company and its employees for long-term success. The mediator set the next negotiating dates for March 6-8 in Washington, DC at the National Mediation Board office.

The proposal included:

  • Compensation:
    • Signing bonus of 4% on date of signing  (DOS)
    • 3% lump sum increase six (6) months after date of signing
    • 1.5% structural increase 18 months after date of signing
    • 3% lump sum increase thirty (30) months after date of signing, convertible in whole or in part to a structural increase to keep American’s relative standing in the industry for the Fleet Service maximum hourly rate.
    • A full-time Fleet Service Clerk at max would get approximately $4,531 in lump sums throughout the life of the agreement and the max hourly chart rate would increase to $21.48.
    • A part-time Fleet Service Clerk at max would get approximately $2,265 in lump sums throughout the life of the agreement and the max hourly chart rate would increase to $21.48.
    • A full time Crew Chief at max would get approximately $4,971 in lump sums throughout the life of the agreement and the max hourly chart rate would increase to $23.60.
  • Holidays: Increase rate of pay from 1.5x to 2x, but keep the same number of holidays in order to fund the structural increase.
  • Vacation: Increase accrual rate for employees with less than 5 years of service for a total of eighty (80) hours of vacation a year or two weeks.
  • Sick Leave: No change in sick leave.
  • Retirement Benefits: Provide a defined contribution 401(k) plan for new hires, making American more competitive in the industry. Only one AA competitor currently offers a defined benefit plan while others have terminated or frozen their plans. New Hires would be automatically enrolled in the $uper $aver Plus 401(k) plan to include a 100 percent company match for employee contributions up to 5.5 percent. Current employees would have a one-time choice to stay in the current defined benefit plan or change to the defined contribution 401(k) plan.
  • Retiree Medical: American’s proposal guarantees access to coverage, regardless of employee health status – both before and after age 65 – but modifies the funding of those programs to better align American with the industry and corporate America.
    • Current Retirees – Make no changes to plans for current retirees. The changes outlined below would begin for retirements on or after 1/1/2011.
    • Current employees will have pre-funding balances refunded. The average balance is about $5,000.
    • Current Employee Pre-65 – Retirees leaving after 1/1/11 will make monthly retiree medical payments to cover a portion of the cost. The company's proposal is that employees will pay the same portion of costs that management pays, which today is 25 percent but could change over time.
    • Current Employee Post-65 – At age 65, retirees will receive access to a series of Medicare supplement plans offered by UnitedHealthcare. The plans will be "guaranteed issue" meaning any employee will be eligible, regardless of medical history or condition. The employee will pay 100 percent of the premiums for the Medicare supplement coverage.
    • Terms of Retiree Medical will be as good or better than the retiree medical plan design, eligibility and contributions offered to management.
    • New Hires – Pre-65 retirees will have access to retiree medical coverage with no company subsidy. The new hire will pay the full contribution. Post-65 retiree coverage will be replaced by a guaranteed issue, employee paid Medigap plan.
  • Profit Sharing: Replace the current financial component of the AIP plan with an uncapped annual profit sharing plan rewarding employees at the first dollar earned and matches the richest plan in the industry.
  • Eagle ASM Cap: The current Eagle ASM Letter restricts American’s ability to compete with other legacy carriers and their regional partners because of the number of American Eagle/American Connection available seat miles (ASMs) American can fly relative to the American Airlines ASMs across the network.

    American would like to have the flexibility to increase its number of regional ASMs to optimize our network. The company proposes modifying the cap to not exceed the industry average (based on CO, DL, UA and US with their regional partners), which currently stands at 21.3%.
  • Scope: American proposes outsourcing the dayline cabin cleaning function and fueling (at some locations in the future), but with furlough protection to be provided by managing surplus with attrition and/or voluntary separation programs as follows:
    • For employees who retire from AA by January 1, 2011 or resign from AA under the 50/55 rule by January 1, 2011:
      •  Lump sums paid in 2010 will be considered pensionable earnings for purpose of calculating pension benefit.
      • Retiree medical terms and conditions will remain unchanged and will retire with current retiree medical benefits.
      • A special voluntary separation allowance of $20,000 will be given.
    • For employees who resign from AA and forfeit any recall rights by January 1, 2011:
      • A special voluntary separation allowance of $20,000 will be given.
  • Duration of Agreement: American proposes a duration of agreement until DOS plus 48 months. Either party may elect to open the agreement six months prior to the amendable date.

    • To view the company's comprehensive proposal, click here.