MaxKts

July 2007

Many of you have asked what I personally think of the FDA LOA (verses the ALPA line). The long and short of it is that my personal belief on an issue does not affect my ability to represent you nor address your concerns. Guy, Ron, and I have been besieged by your questions and opinions pertaining to the FDA LOA. Hopefully the following notes will shed some light on any issues regarding the LOA, helping you make a well-informed decision. My sincerest apologies in the delay (beyond my control) publishing these notes.


When I first heard of the LOA I was excited about the prospect and believed it offered many benefits above the CBA. Heaps of negative info, comments, and questions followed on a myriad of aspects of the LOA, including the lack of an education allowance, the ‘inadequate’ housing allowance, and how the STV provisions could be a bad deal for junior pilots. I was undecided on how to vote, able to talk myself into voting YEAH or NAY on any given day, eagerly searching for more information.


After attending our LEC meeting July 19 with special guest Captain Bob Chimenti, ALPA Negotiating Committee Chairman, I have resolutely decided to vote ‘YES’ in favor of this LOA. After listening to Bob’s presentation, I now firmly believe that the Scope and RLA protections, as well as the flexibility and compensation of this LOA are better than what we currently have under the CBA-which has no provisions for any housing allowance, education allowance, tax-gross-up, nor STVs (for FDAs except as provided under SIBA.)


What follows is a lengthy recount of what Bob discussed. Lack of communication and access to information has been a big complaint of ANC pilots. Since most of us don’t have the option to attend Hub or Town Hall Meetings, what follows are the notes that I took at the LEC 79 meeting on July 19th. Please feel free to call or e-mail Guy, Ron, or myself if you have any questions.


In Unity –


Captain Susie Latvala


** Message from ALPA Communications: While well-intended, Captain Latvala’s notes may not be an accurate representation of the comments offered by Captain Chimenti. Please read this recount with caution and in the context of other MEC publications regarding the LOA.


July 19, 2007 – Snow Goose Restaurant, Anchorage

Special Guest Captain Bob Chimenti


Bob recognizes that some people think the LOA is inadequate in certain areas. Bob wouldn’t have brought the LOA back to the MEC if he didn’t think it was fair. He’s never brought anything to the MEC that he didn’t consider fair and gave the example of the proposed cash balance plan for new hires a few years ago which was turned down at the table. He didn’t think it was fair for everybody.


Bob said it’s not true that ALPA is accused for negotiating this LOA to benefit only a certain group of pilots (i.e. empty nesters). Certain domiciles have always been more attractive to certain groups (i.e. LAX favored Tigers and Navy pilots from SAN, or if MEM was attractive for everybody to live there, 70% of MEM based pilots would not be commuters). Obviously, only particular pilots will want to bid CDG or HKG, but the LOA is fair for everybody.


ALPA negotiated HKG in lieu of CAN (Guangzhou) - that city was so bleak and dirty that they told the company FDX pilots couldn’t be forced to live in CAN. The company agreed to make the base HKG (it’s within 100nm). HKG base requires GT and this will cost the company 15% productivity from the crew due to 3 hours commute each way.


Are there $9k apartments in MEM or LAX? Yes…just as expensive apartments exist in HKG. However, there are lots of apartments ranging from $2500-$4000 in great areas with expats and they are clean. The Negotiating Committee did not think a pilot going to HKG should have all their housing expenses paid. Just like the company doesn’t pay housing in MEM, ANC or LAX. The company figured the average mortgage+utilities for a pilot is around $3000. ALPA used $2000 a pilot for an estimate of out of pocket, so housing allowance (FDX) $2700 + (pilot) $2000 = $4700 month (apartment in HKG or CDG). If you don’t want to pay some out of pocket, don’t consider the base.


One of the biggest aspects of this LOA is enhanced Scope protection. This is a huge benefit for FedEx pilots because over the years we are getting lots of growth and most of it is international. Having ALPA and FedEx agreeing to extend the RLA to HKG and CDG benefits both groups in the long run.


During LOA negotiations, ALPA didn’t talk much about CDG – many very senior people are going to bid it. Many senior pilots will bid HKG too. 65% of pilots on our seniority list have been hired since 1995. Lots of new guys who don’t know some of the ‘inglorious’ history here. When SFS was opened, FDX said not to be covered by RLA. ALPA put out a notice not to bid SFS. That bid filled up in days - plenty of folks bid it anyway. And there were no financial incentives to bid the base. HKG will be bid whether the LOA passes or not – they only need 75-80 pilots. Bob’s not going to preach doom and gloom, but he doubts that FDX will go back to renegotiate LOA if it’s voted down.


Pilots had the same attitude in 1995 when that TA was voted down - lots of anger. In 1998 when we finally got a contract - it was no better than the TA voted down in 1995. In two areas it was much worse – Scope and trip rig. SCOPE clause in the TA voted down was with the holding company, not just Express. TRIP rig was 3.43:1, but became 4:1 in 1998, with not a significant pay increase. That may not happen here, but pilots should vote for this LOA because it’s fair.


When we open the bases in 2008, less than 2 years from Section 6 openers, that’s the time to improve the LOA because self help is available. If LOA is in place, we’ll only be arguing about the numbers, not trying to structure a deal from scratch. Any problems with the $2700 or tax-equalization may be addressed in Section 6.


STVs. All the talk about STVs pertained to opening Paris (not HKG) because CDG is being opened up with new airplanes. 757s delivered at the same time pilots are going thru training. In the event of bust, etc, then FDX could STV. Bob came up with the idea – hotel, per diem, families, thinks it’s a great idea. As far as inverse seniority, Bob doesn’t think it’s going to happen. Bob feels FDX is not going to take a new hire and send them over; the likelihood of an STV for HKG or CDG is not going to happen. If it does it will go senior (editor’s note: a side letter was approved 25jul07 limiting STVs to 1 bid period).


During negotiations for Contract 2006, ALPA sat down every day, every week no matter what the section was and started with section 1. Bob figured there was no sense in having an agenda if scope wasn’t worked out. Nothing else really mattered until scope was complete. Look at NWA – 4 operating certificates…Plus code shares with KLM and CAL. We don’t do that. We get all the flying. We want all the flying. The problem is because we want it all and FDX gave it to us, we have to do it. If we want it and we don’t do it, we greatly weaken our position in the future. The LOA is for 2 years before we can amend it (Section 6). We need to open the bases under this LOA and do all the flying! HKG is not going to be an Airbus base for long. It will turn into an MD base (MD10-30?). CDG will eventually be a widebody base too (not sure if A300 or MD). The new Paris flying is not replacing what we’re currently doing, they are all new cities. We’ll be serving 56 new cities in Europe. All new flying. Bob wasn’t going to stand there and tell us if we turn it down that we won’t get the flying, we probably will anyway. But it’s important for us (ALPA) to make deals and keep deals. ALPA knew that we’d have a contract last 7/20/06 – that was the first time the company came in and made a deal on scope. The fact they agreed there would be only one operating certificate is huge.