RockBottom

This is Erik Engdahl with your ATA VARS Message for Friday, July 29th.

There will be three items in this message:

#1. Negotiations Update
#2. MEC Changes
#3. SPC Event

Item #1. - Negotiations Update

Earlier today the MEC met via conference call with the Negotiating Committee,

our bankruptcy lawyer and our ALPA staff to discuss the status of our talks with

the Company regarding long-term contract changes. Unfortunately, we learned the

negotiations are not going well, and we may wind up going to an 1113 bankruptcy

hearing where the judge could impose his own set of contract terms and

conditions upon us. Let me explain how we got to where we are now, and where we

may be going next.



At the beginning of the week Al Terry and his negotiating team presented our

comprehensive contract proposal to the Company for review. Our negotiators spent

several weeks going over the CBA and ATA's operations with a fine-tooth comb,

looking for every opportunity to save ATA money WITHOUT reducing our

compensation and retirement. They identified millions of dollars in direct

savings through trip rigs, duty rigs, other scheduling improvements and

additional changes. Mark Kesling of the R&I Committee and Richard Pavel of

ALPA's R&I Department looked over the retirement, health care and CMPP portions

of the CBA. We thought we were working productively with the Company and looked

forward to their counterproposal.



Today the Company came back to our negotiators and essentially gave them a

demand that is virtually identical to the contract terms they asked for in May.

This was not a counterproposal, but a reiteration of the same requests they have

been making for months. The dollar value they seek to take from us is roughly

twice as much as what Al presented in the ALPA proposal, and they have not

budged from that original number, even though they cannot explain to us how that

dollar figure will actually help ATA survive... that is, they have not told us

how their proposal fits into the larger scheme of their business plan.



We are still willing to negotiate with the Company, up to and including August

10, the day they say they will file an 1113 motion if a TA is not reached. But

based on the Company's almost total unwillingness to compromise, we can only

assume that we are headed for bankruptcy court, perhaps as early as the week

after next. We are now focusing our efforts in two directions: negotiation and

litigation.



On the negotiation side, we have asked for a meeting next week with ATA's new

Chief Financial Officer, Frank Conway. We want to discuss a discrepancy in our

valuation of the proposals versus the company's, find out exactly how the

Company reached the dollar value it has set for concessions from us, and how our

giving that money will help them reorganize and become competitive. We are

already the lowest-cost carrier in the industry -- we demand to know how cutting

our compensation can possibly save the company when nothing is being done to

build up the revenue side of the house.



On the litigation side, our attorneys are preparing our arguments in advance of

the anticipated 1113 filing. We believe we have a good case. We have already

sacrificed far more than any other employee group, both in compensation and

furloughs. In terms of raw dollars we have already contributed more money to the

airline than Southwest has. Southwest received a 27 percent share of the airline

in exchange for its investment - what have we gotten back so far?



The clock is ticking and it looks as though the decision date is August 10. The

MEC and ALPA are prepared for whatever happens, and we will fight any effort to

further cut your pay, whether it is proposed by the Company or imposed by Judge

Lorch.



Item #2. - MEC Changes



Those of you in Council 97 should know by now that LEC 97 Chairman Capt. Kevin

Friel is resigning his position, effective August 1st. An LEC meeting will be

held in Indianapolis on August 11 to name an interim replacement and accept

nominations for a permanent captain's rep. Kevin has spent the last several

years working for this union at the LEC, MEC and committee levels, and we will

miss his energy and sound advice.



Council 98 Flight Engineer Rep Frank Thomas will also be missing from the MEC

for a while. Frank was recently diagnosed with cancer and will be undergoing

radiation and chemotherapy treatment at Stanford University Hospital. Please

join me in sending best wishes to Frank and his family, and I know we will all

be praying for his fast and complete recovery.



Item #3. - SPC Event



Capt. Seth Cooperman would like to announce the next Family Awareness event

hosted by the SPC Committee. The SPC will be sponsoring a get-together in

Phoenix at the end of August, probably either August 20th or 27th. The details

haven't been finalized, but we will have free food and family members will be

invited, just like the SPC barbecue we had the week before last in Chicago.

We'll give you more information once the planning has been completed.



That's it for this week. Have a great weekend, fly safe, and be sure to check

your voicemail and e-mail regularly for MEC updates.



Erik Engdahl, MEC Chairman

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Rusty Ayers, MEC Communications Specialist