Message From MEC Chairman Captain Wendy Morse

December 31, 2011

As many of you have heard, UCH management and the CAL-MEC announced on Friday profit sharing to the Continental pilots for 2011 in return for a settlement of a grievance related to the parking and sale of L-CAL 767-200s. The CAL pilot contract did not include profit sharing and both our MECs were in joint negotiations with management to include it along with equitable consideration for L-United pilots within the renegotiation of the Transition and Process Agreement.

Unfortunately management was unwilling to entertain any equivalent extra-contractual monetary consideration for L-United pilots. The UAL-MEC fully supported our brother and sister pilots receiving profit sharing to recognize their contributions to the success of our airline, but we also believe our pilots’ contributions should also have been equitably recognized.

So where were we on the Transition and Process Agreement termination provisions? The company informed us that it is not willing to continue the domicile protection provisions. As its managers have stated publicly, the company wants the ability to move airplanes to right size the routes, meaning putting CAL guppies in our hubs and our Airbuses in their hubs. They do not plan to terminate the furlough protection or the flying ratio protection, and would be willing to extend those two termination provisions (furlough protection and flying ratios) for 2012, with a new expiration date of December 31, 2012. This would be in return for us agreeing to profit sharing for CAL pilots with no additional extra-contractual financial consideration for the United pilots, and us agreeing to jointly terminate the domicile protections.

We passed back a proposal that includes the elimination of the partial termination clauses, profit sharing for the CAL pilot group until JCBA ratification, an annual bonus for United pilots equivalent to CAL profit sharing, and modified domicile protection. The domicile protection that we passed to the company would allow the company to open new bases with a restriction that block hours in that domicile currently flown by the legacy are reduced by a small percentage, with grandfather rights back.

Late this week, the company rejected our counter and stated: “Please be advised that even with your rejection of our TPA extension proposal, we have no current intention of terminating the no-furlough and ratio protections in the TPA.”

So where do we go from here? If I were still in office next week, at the open of business on Tuesday morning I would prepare to file a violation of the status quo outlined in Section 6 of the Railway Labor Act against the company. Additionally, I would be filing a dispute under the Transition and Process Agreement. It will be up to the new officers and the MEC to decide how to proceed.

Achieving a JCBA remains the real solution. I have told this management before that every day more of our pilots become discouraged, and, as many have described to me, will no longer be willing to lift an extra finger for this company again. And these same people say they never again will be willing to do so. This latest action by the company regarding the T&PA will not help to reverse that trend.

When this merger was announced on May 3, 2010, it appeared CAL was intending to bring its highly touted “J.D. Power-approved” culture to a combined “new” United Airlines. The media labeled United Airlines as broken and, with Jeff Smisek at the helm, we were going to breathe new life into a sleeping giant by adding Continental’s culture to United’s global network. The CEO himself has touted the notion that he does not care about being the “largest” airline in the world, but rather the “leading” airline in the world.

Unfortunately for Mr. Smisek, for tens of thousands of L-UAL employees and increasing numbers of the financial community, these and other such Dilbertesque platitudes are falling on increasingly deaf ears.

From 1994 to 2000, United Airlines was the most profitable it had been in its history during an ESOP where a “can-do” culture created happy, enthusiastic and satisfied employees, many of whom were taking pay cuts just to make the ESOP happen. UAL was literally flying.

Since that period of prosperity, UAL endured a highly divisive and destructive 39-month bankruptcy and pilots, along with other employee groups, provided previously unfathomable concessions to save the company. We went to extraordinary lengths to ensure that UAL exited bankruptcy and, within the first year, was highly profitable. In fact, it was so profitable on the backs of our concessions, that UAL paid an extraordinary dividend and immediately paid off the exit financing.

All the while, UAL pilots sat patiently waiting for their turn to negotiate much needed improvements to their bankruptcy agreement. We continued to provide safe, efficient and profitable service to the company and our passengers, while grudgingly accepting our position as among the lowest paid pilots in the industry. In short, we continued to ensure UAL was a successful airline.

However, almost a year after we began negotiations on that new CBA, UAL announced it was buying CAL in a stock swap, and that JCBA negotiations would supersede the UAL negotiations already under way. Today, over two and half years after we first began negotiating a non-concessionary, post-bankruptcy agreement, our legacy domicile structure is being encroached upon. One wonders how many more burdens this pilot group is going to be asked to bear.

Accordingly, one wonders what Mr. Smisek believes J.D. Power might say about UAL today under his stewardship. It is clear that while a fresh coat of paint has been slapped on the aircraft, our customers and employees have struggled through rather painful onboard announcements, and the actual hard work of closing contracts, aligning services and creating a seamless product are floundering at best. Ironically, it is in those very same operational areas, where “leading” airlines excel, and we are far from doing it, even given the Herculean efforts of the pilot group.

As pilots, we are a forgiving bunch. We have been furloughed, had to sue for seniority and lost our pensions. However, even as I have publicly applauded our collective ability to “get the job done,” I have been telling this management they are losing this pilot group, pilot by pilot, day by day.

As pilots, we are, by our nature, a conservative group of individuals who come together as an Association with a common cause: a decent, honorable working agreement that allows us to live a decent life, put our kids through college and enjoy the increasingly less time we get to spend with families. We know we have to put up a struggle for everything we get, but at the end of the day we are usually satisfied that a fair fight for fair rewards is a fair deal.

Today, it appears that bargain no longer exists. In fact, it may not have existed for a very long time, but we are, as I said, generally a forgiving and conservative group. Sadly, especially for Mr. Smisek, those days may already have come to an end. With his current stance on the T&PA, CAL profit sharing and the general mistreatment and disrespect of L-UAL pilots, in general, he may have made a fatal miscalculation.

Nothing brings pilots together better than management action or inaction. A TRULY unified pilot group appears to be the ONLY thing that UCH management will listen to.
I thank you for your attention and hope that in the days and months ahead, as the fight that UCH management has chosen with the L-UAL pilot group intensifies, you remain as educated and informed as possible and provide your strong support to your own local representatives who are going to be fighting this battle on your behalf.

Please do not make the mistake of underestimating the forces aligned against you in the continuing struggle for a fair T&PA, equivalent treatment of your concerns and a JCBA that accurately reflects all that you have done to make this company what it is today. Without your continued efforts and professionalism, this company would be nothing. Therein resides a truth in which UCH management has yet to come to terms.

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