Originally Posted by alfaromeo

When the APA negotiated their MOU transition agreement, they included a set of parameters for their JCBA. I believe that they agreed to a limit of $80 million of additional contractual benefit for the JCBA. They have 4+ years left on the deal so that is about $20 million per year. If they can't reach agreement in 30 days, it goes to mandatory arbitration with Rich Bloch or Ira Jaffe.

That being said, the APA has probably noticed that Delta just added $40 million per year to a contract that already was far ahead of their MOU deal. My guess is that they are going to try to continue their new proactive engagement strategy with their management and see if they can get some deal better than the one called for in the MOU. AMR management has the ability to force compliance with the MOU (through arbitration) but perhaps they want to continue to develop a new relationship with the APA and the pilots and will agree to more improvements.

The primary problem the APA faces is they tried to stiff arm negotiations through the bankruptcy. They had their contract rejected and faced the loss of their bankruptcy claim. The second deal they negotiated added little if any value to their contract it mostly shuffled the chairs around. That left them with a horrible scheduling section, especially reserve, that was essentially crammed down their throats. They would probably need somewhere around $80-100 million per year just to reach the Delta reserve system. If you remember, the Delta scheduling/reserve system was negotiated over a period of about 10 months in 2004 prior to bankruptcy. Most of that system was created according to the parameters set by the union and not the company. The APA didn't really engage in negotiations until the last few weeks and thus lost control of the process.

One could assume that much of the value (either the MOU amount or some larger amount if possible) would go to their scheduling and reserve system. That means there would be little left for pay rates.

In the end, any value they add is good for us. They APA is definitely trying a new tack and are developing a better business relationship with their management. It seems like AMR is trying to turn that corner also, so there is reason to hope that they will exceed the MOU value in their JCBA negotiations.