Diesel 10

Council 12 Weekend Update : July 16th 2005

This week we held our regularly scheduled monthly meeting of Council 12. At
the meeting we had a guest speaker, Captain Duane Woerth. In this Weekend
Update, we have synopsized Captain Woerth's visit, including his remarks and
the Q&A that followed for over two hours.


Synopsis of Council 12 Meeting with Duane Woerth

The July 11th Council 12 meeting came to order at 10:00 in the Penthouse
Ballroom of the Ramada O'Hare Plaza.

There were 45 attendees total; 1 wife, 1 furloughee, 2 MEC officers, 1 MEC
Staff member, 7 ALPA volunteers and 3 retirees present were present in the
audience.

Chairman Neil Swindells rose with a brief introduction of our Guest Speaker,
Captain Duane Woerth, President of ALPA International:

Today, it gives me great pleasure to be the Chairman of Council 12 and
provide the pilots of this great Council the opportunity to hear and
converse with the President of ALPA International, Captain Duane Woerth. In
addition, I would also like to acknowledge UAL Captain Paul Rice, Vice
President of Administration and Pete Janhunen of ALPA Communications for
being here today.

This is the first and, to my knowledge, the only UAL Council Captain Woerth
has traveled to speak to, so I am honored he accepted our invitation to
speak to you firsthand and unfiltered.

The genesis of this visit owes itself to some remarks I made in my first
letter to you as your Council Chairman in March of this year.

Those comments were:

(Quote)"I know there are some of you who are somewhat disenchanted with the
seeming lack of effort and coordination of the ALPA National officers with
respect to our predicament during bankruptcy. I can assure you that ALPA
National is VERY aware of the feelings of your MEC and your Master Chairman,
and they are not all good. As your Council Chairman, I will continue to hold
National's feet to the fire on issues that face us today and into the
future.

We rightfully expect ALPA National to be responsive to the needs of UAL
pilots, especially when many of the battles we are fighting are precursors
to the battles ALL ALPA pilots will be fighting shortly. I am personally
disappointed in some of the things I have seen from Herndon in recent
months".(Unquote)

Those statements led to some phone calls and discussions of the issues and
then, ultimately, Captain Woerth's visit today. He has agreed to address
your concerns about ALPA, the Industry and anything else that is on your
mind concerning this Association and our place as United Pilots within the
Association and the Industry.

However, before we begin, I would like to quote part of Captain Woerth's
speech to the ALPA BOD in October of 2004, which illuminated what many
people believe is one of our fundamental problems, both in terms of both Jet
Feeders at home and International Alliance partners abroad.

Captain Woerth said:

(Quote) "A dynamic that our predecessors did not have to contend with was
airline brand management. Regulation essentially prevented it by route
authority limitations.

Today, airline brands for both passenger and all-cargo operations have
developed elaborate strategies to get pilots who work for separate companies
with separate contracts and seniority lists to compete for work within the
brand on a "lowest-bid" basis. Of all the challenges vexing us in the first
years of the 21st Century, this may be the greatest.

The Bilateral Scope Impact Committee's report that went to the Executive
Board was embraced and acclaimed for good reason. It cut to the heart of the
matter and succinctly stated the obvious: job security and career
progression opportunities are two sides of the same coin. Against an airline
brand management strategy, only a counter strategy by the pilots within the
brand to deal with both issues together has any chance of succeeding.

If we want to stop erosion of ALPA pay standards, we must deal with job
security and career progression as a single issue. A combination of fences
and bridges will be required. If we accept the status quo, the race to the
bottom will continue.

If we stop pointing fingers and start joining hands, some group of pilots
within some brand will be the first to develop a prototype model that stops
the bleeding. It is said that "necessity" is the mother of invention. With
all the pain, with all the bloodshed within our ranks, we should have all
the "necessity" we need to invent something new to stop the whipsawing.

To steal a line from Bob Chimenti, chairman of the FedEx Negotiating
Committee, 'For a collective bargaining breakthrough of this magnitude, line
pilots will erect 10-foot tall statues of the negotiators who will deliver
it.' He could be right - it's that important."(Unquote)

On behalf of the pilots of Council 12 and United pilots everywhere, I hope
Captain Woerth can help provide the leadership needed to find the solution
to that particular problem, especially while faced with a growing feeder jet
influence within the Association at the possible expense of those who both
built and fund it. I also hope that the 10 foot statue erected after the
solution is found contains a United Airlines pilot standing arm in arm with
his Brother and Sister pilots across the Association.

I thank you all for your attendance today and now I would like to introduce
Captain Duane Woerth, President of ALPA International.


Captain Duane Woerth's Remarks:

"State of the Union"

. ALPA Natl. Finances were $139m/yr in income in '01when ALPA was in an
organizing effort with Fed Ex, Continental, which added 12,000 new members
in 24 months.
. ALPA has remained in black through the whole period of this downturn and
concessionary period and has $100m/yr revenue now.
. Major Contingency Fund is now at approximately $80m+ cash, and the
Association has about $20m in real estate property. We also have our own
offshore insurance subsidiary called Kittyhawk.
. Union is stronger now financially than in even the recent past, the
decrease in revenues notwithstanding.

Pensions

. Spring '02 was first exposure by ALPA to deficit reduction contributions
with US Airways.
. There were only 8 pensions in 43 airlines in ALPA
. There are currently only 3 pensions left in the 41 remaining airlines
. Only fix is legislative, which became apparent in '02 discussions with
Congress
. Airlines worked to oppose legislation sought by ALPA.
. In early '03, launched new effort legislatively co-sponsored by 125 people
congressmen/women
. AA, NWA, and UAL all supported legislation, DAL did not.
. Bush 100% opposed to relief and opposed ATSB process.
. As for post 9/11 recovery, Congress only approved $5B in bailout vs. $15B
requested, with the PBGC also opposing DRC legislation
. Thought something was finally done in Nov '03, it was only a 2 year
deferment that passed the House, with the Senate passing it in April '04.
. It was ALWAYS seen as a "band aid" fix though as everyone saw the need to
do wholesale reform of the DB situation.
. At UAL, the ATSB then did not approve a loan guarantee that was ready to
be put in place, as the Bush White House torpedoed the process. Therefore,
only 16% of $10B allocated to airlines was used, with the Government now
approving a merger between the two main recipients of the loan guarantee.
. AT THAT TIME, United management then saw the writing on the wall and
stopped working on pension reform, which the White House had effectively
snuffed out.
. ALPA and some in Congress are still currently working on legislation, but
the future of the reform is uncertain

Age 60

. Age 60 has been issue for decades, even since it was enacted by the FAA in
1959.
. Because of the current state of industry and perceived changes within the
Association, ALPA surveyed the entire membership and did a telephone survey
to back up those "self-selection" results (pilots self selected whether to
take the poll or not).
. Captain Woerth was surprised at the survey results, as he expected a tie
or results much closer to even. The results showed about a 17 point gulf in
favor of maintaining Age 60.
. The issue comes up in congress regularly, almost annually
. Ted Stevens, Chairman of the Commerce committee wants to change rule and
may have support in Congress to pass it this time.

Brand Management/Feeders/International

. ALPA represents 41 airlines
. You can buy tickets on 11 airlines for cargo, but only 6 for passenger
travel.
. Fee for departure and cost plus contracts (20%+ guaranteed profit in some
cases) has been a disaster for majors! Management should be shot!
. Now it is more "pay to play" and Mesa just had to pay UAL $30m to be a UAL
feeder.
. The 50 seat jet is the most expensive unit cost airliner ever built.
. Now 20% more airplanes flying less people than before 9/11
. Independence Air is a perfect example of an airline that can't self
support a 50 seat airline product if they pay for all of their own expenses.

Security

. ALPA working to improve FFDO training and quality of life with respect to
carrying procedures.
. Transportation Worker ID Card (TWIC) was approved and ready for rollout
PRIOR to 9/11. These smart cards have now been put on the back-burner by the
TSA in an attempt to re-invent the wheel.
. Captain Woerth joined the "Trusted Traveler program." It took him 2 days
to get through the entire process, but the pilot background check takes 2
months. This is just ridiculous.
. Congress must intervene and go over the top of the TSA to help our plight.