What Do You Get for 1.95%?
01-21-2008, 08:31 PM
#1
Banned
Thread Starter
Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
What Do You Get for 1.95%?
What Do You Get for 1.95%?
The Best Pilot Union Money Can Buy
ALPA members support their union’s many activities through dues representing 1.95% of their airline income. Where does that money go? What do members get in return? These are legitimate questions, and they all have answers that point to one conclusion: The Best Pilot Union Money Can Buy
Your dues dollars pay for a level and range of services that pilots need, demand, and could not get anywhere else. With ALPA, your dues dollars buy a lot more as part of a larger group than could be afforded by an individual pilot group at 1.95% of income.
Unfortunately, we have seen a few “reports” that claim otherwise. By quoting various sources out of context, including government filings, they use innuendo and outright accusations to attack the Association and present an inaccurate and incomplete view of ALPA’s expenditures through a distorted lens. What follows is a more detailed “walk-around” to put those various expenditures into proper perspective.
Volunteers Don’t Come “Free”
One of ALPA’s biggest expense categories is the cost of supporting the vast network of pilots who volunteer their time and energies for ALPA safety, security, bargaining, and representation activities. The Association simply could not function without them. Only one pilot member is an ALPA employee getting a paycheck—the President. ALPA’s President must be independent from any one airline and responsible only to the Association’s members.
Out of both fairness and practicality, volunteers cannot be expected to foot all their own losses when performing ALPA business. Besides obvious out-of-pocket expenses, some volunteers may have to drop trips in order to perform certain functions. Long ago, ALPA recognized the need to make up for some or all of its volunteers’ lost income (always with their MEC’s support).
Flight pay loss is essential
Flight pay loss (FPL) expenditures are carefully monitored and controlled, and ALPA’s policies require each MEC to report flight pay loss expenditures to the membership on a regular basis. ALPA pays approximately one-fifth of its total dues income ($22 million in 2006 alone) toward flight pay loss. Only about 14% of that amount is to allow pilots to participate in the work of ALPA’s National Committees. The rest is paid by MECs for their pilots to work on the issues that are important to their individual pilot groups. In other words, these expenses were authorized by your local leaders to support your pilot group’s activities. Ask any volunteer: A pilot union cannot be effective without extensive use of FPL.
Your pilot reps determine National Officers’ compensation
In addition to the pilot representatives at ALPA’s 42 pilot groups, the union has four full-time National Officers: President, First Vice President, Vice President–Administration/Secretary, and Vice President–Finance/Treasurer. Their reimbursements are fixed by Board of Directors policy (your elected reps).
The ALPA Board of Directors, which is made up of the elected reps from every pilot group within our union, adopted a fixed formula for calculating presidential compensation in 1970, with modifications and additions made by the Board every four years since. In 2006, the President’s salary was based on the average pay of the highest-paying pilot position at the top three ALPA airlines. Beginning in 2007, the President’s salary is based on the average pay of the highest-paying pilot position at the top five ALPA airlines.
FPL compensation for ALPA’s three other National Officers is at the rate of the highest-paying equipment each is entitled to hold in accordance with his system seniority at his airline. All the National Officers who held office from 2003 through 2006 took the pay cuts that occurred at their respective airlines or, in the case of the President, cuts that were reflected in the airline formula approved by the Board of Directors.
FPL for National Officers is not incorporated into the ALPA disbursements in the LM-2 report because the Officers are paid directly by their airline and ALPA reimburses the airlines for the FPL costs. (Also, the National Officers receive no retirement or benefit plan other than the one provided by the contract at their airline.)
What is a “service allowance”?
All ALPA National Officers receive a service allowance (to cover expenses incurred in their duties as National Officer) and a dislocation allowance (to cover housing, meals, and travel expenses for the Washington, D.C., area, which has one of the highest costs of living in the nation). Such allowances, which are reviewed annually by the Special Compensation Review Committee (composed of five ALPA MEC chairmen) and approved by ALPA’s Board of Directors, are taxable income, so the pre-tax amounts shown on LM-2 reports are set to provide adequate post-tax amounts to cover living and other expenses, including commuting to their hometowns.
ALPA’s Executive Administrator, selected by the President, also receives FPL reimbursement and allowances under provisions identical to those of the National Officers other than the President and which are approved annually by ALPA’s Executive Council.
These allowances comprise approximately 80% of the disbursements ALPA makes to its three other National Officers and the Executive Administrator and reported on its LM-2. The remaining disbursements include vacation cash-out (consistent with the policy of the particular National Officer’s or Executive Administrator’s MEC) and reimbursement for expenses incurred while performing ALPA business. The President’s salary is also included in his disbursement amount as reported on the LM-2.
According to the BOD-approved compensation provisions for National Officers who retire while in office, ALPA will pay “the difference between what the officer earned, on average, during the six months immediately preceding becoming a Retired Member and the airline-funded retirement income he or she is entitled to receive.” This “differential pay” is paid directly by ALPA to the applicable National Officer and is also included in the disbursements on the LM-2.
All such disbursements and reimbursements are subject to policies approved by ALPA’s pilot-run governing bodies—MECs, the Executive Board, or the Board of Directors. Again—your elected reps.
Continued on next post
01-21-2008, 08:32 PM
#2
Banned
Thread Starter
Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
Continued from previous post
ALPA Staff Is the Best in the Business
Because of its unique identity as a labor union, a collective bargaining representative, and a safety and security advocate, the Association requires a broad range of staff expertise. Pilot members have made it abundantly clear that they will accept nothing less than well-credentialed and highly experienced staff to support them in the Association’s work.
ALPA members have also demanded that long-term staff be retained to guard against the memory and knowledge gap that inevitably occurs when pilot officers and representatives return to line flying after volunteering. ALPA is fortunate to have attracted extremely well-qualified and dedicated professional staff.
Consultants cost more
Senior members in virtually every department have between 20 and 35 years of ALPA experience.
These senior staff members provide service on behalf of any one or more of the 42 airlines whose pilots ALPA represents, and they do that work when, where, and how it needs to be done. Given such extensive hours, ALPA has determined that it is in both the union’s and the members’ best interest to employ these professionals rather than to pay $200–$400 or more per hour for consultants or outside attorneys. The Continental and FedEx pilots voted to return to ALPA in 2001 and 2002, respectively, largely because they concluded that only ALPA, with its staff focusing exclusively on pilot issues, had the professional expertise to help them meet the needs of their pilot groups.
With 60,000 members, $105 million in dues revenue, 390 employees, 20 offices, approximately 200 “units” (MECs, LECs, departments, national committees), a captive insurance company (Kitty Hawk) providing insurance protection and over $225 million of funds invested, ALPA is a sizable operation that requires significant financial and operating expertise. But economies of scale permit ALPA to employ qualified staff across units much less expensively than if each unit stood on its own.
ALPA must compete for its high-quality staff
To ensure that the Association can attract well-qualified employees, ALPA strives to compensate its employees at levels that are competitive for their positions in the area in which they live. (Nearly two-thirds of our employees live and work in the Washington, D.C., metro area, where the cost of living is over one-third higher than the national average.)
Figures quoted to you from government LM-2 filings include not just salaries, but also the cashed-out value of vacations that employees were unable to take due to the heavy workload, along with reimbursements for required work-related travel and other out-of-pocket expenses that the Union is required to report to the government.
Staff reduced, salaries frozen after 9/11
ALPA staff has not been immune to the financial woes of the industry. Fifteen percent of ALPA staff positions were eliminated between 2003 and 2006 as pilot compensation and dues revenue dropped after 9/11. The salaries of the remaining employees—from senior management to those represented by ALPA professional and administrative unions—have been frozen periodically, and their pay increases have been lower than in earlier years. Obviously, workloads for the remaining employees have increased substantially to cover the loss of 15% of their colleagues.
Clearly, the average member sees little of this. But virtually any pilot volunteer who has worked with the staff and depended on their support will agree that ALPA could not provide the services demanded by our members without these dedicated workers. Again—just ask them.
Third-Party Suppliers Play a Role
Even with its highly effective staff, ALPA MECs and the national organization must use outside consultants, attorneys, and other specialists. All of these services are covered by ALPA policy, which requires that they be approved by ALPA’s Executive Council.
Some of the vendors—such as Aviation Medicine Advisory Services (AMAS), which provides aeromedical advisory services to ALPA members through ALPA’s Aeromedical office in Denver—are funded exclusively out of ALPA’s National account. However, the vast majority of billing for outside law firms and consultants—including Cohen, Weiss and Simon (bankruptcy, collective bargaining, and representation legal services) and the Wilson Center (polling)—were incurred by and charged to applicable ALPA MECs. Expenses associated with other consultants—including Buck Consultants (actuaries) and Milestone, Athena and Peter J. Solomon (investment bankers)—were incurred exclusively by MECs.
The Bottom Line: Best in the World vs. . . . ?
Through 76 years of representing pilots, ALPA has assembled a team of pilots and staff unrivaled in their knowledge, expertise, dedication, and cost effectiveness. These resources are funded according to policy and reviewed by your elected representatives—line pilots whom you choose to protect your best interests. The resources you see, and the ones you never see, are provided through business practices created by pilots and run by pilots and are not available through any other single source. If you think you can do it better than ALPA, just ask the FedEx and Continental pilots. They found out the hard way.
Those who selectively highlight government reports and “grandstand” using figures that they don’t understand are not providing accurate information and are doing you a disservice...
ALPA Staff Is the Best in the Business
Because of its unique identity as a labor union, a collective bargaining representative, and a safety and security advocate, the Association requires a broad range of staff expertise. Pilot members have made it abundantly clear that they will accept nothing less than well-credentialed and highly experienced staff to support them in the Association’s work.
ALPA members have also demanded that long-term staff be retained to guard against the memory and knowledge gap that inevitably occurs when pilot officers and representatives return to line flying after volunteering. ALPA is fortunate to have attracted extremely well-qualified and dedicated professional staff.
Consultants cost more
Senior members in virtually every department have between 20 and 35 years of ALPA experience.
These senior staff members provide service on behalf of any one or more of the 42 airlines whose pilots ALPA represents, and they do that work when, where, and how it needs to be done. Given such extensive hours, ALPA has determined that it is in both the union’s and the members’ best interest to employ these professionals rather than to pay $200–$400 or more per hour for consultants or outside attorneys. The Continental and FedEx pilots voted to return to ALPA in 2001 and 2002, respectively, largely because they concluded that only ALPA, with its staff focusing exclusively on pilot issues, had the professional expertise to help them meet the needs of their pilot groups.
With 60,000 members, $105 million in dues revenue, 390 employees, 20 offices, approximately 200 “units” (MECs, LECs, departments, national committees), a captive insurance company (Kitty Hawk) providing insurance protection and over $225 million of funds invested, ALPA is a sizable operation that requires significant financial and operating expertise. But economies of scale permit ALPA to employ qualified staff across units much less expensively than if each unit stood on its own.
ALPA must compete for its high-quality staff
To ensure that the Association can attract well-qualified employees, ALPA strives to compensate its employees at levels that are competitive for their positions in the area in which they live. (Nearly two-thirds of our employees live and work in the Washington, D.C., metro area, where the cost of living is over one-third higher than the national average.)
Figures quoted to you from government LM-2 filings include not just salaries, but also the cashed-out value of vacations that employees were unable to take due to the heavy workload, along with reimbursements for required work-related travel and other out-of-pocket expenses that the Union is required to report to the government.
Staff reduced, salaries frozen after 9/11
ALPA staff has not been immune to the financial woes of the industry. Fifteen percent of ALPA staff positions were eliminated between 2003 and 2006 as pilot compensation and dues revenue dropped after 9/11. The salaries of the remaining employees—from senior management to those represented by ALPA professional and administrative unions—have been frozen periodically, and their pay increases have been lower than in earlier years. Obviously, workloads for the remaining employees have increased substantially to cover the loss of 15% of their colleagues.
Clearly, the average member sees little of this. But virtually any pilot volunteer who has worked with the staff and depended on their support will agree that ALPA could not provide the services demanded by our members without these dedicated workers. Again—just ask them.
Third-Party Suppliers Play a Role
Even with its highly effective staff, ALPA MECs and the national organization must use outside consultants, attorneys, and other specialists. All of these services are covered by ALPA policy, which requires that they be approved by ALPA’s Executive Council.
Some of the vendors—such as Aviation Medicine Advisory Services (AMAS), which provides aeromedical advisory services to ALPA members through ALPA’s Aeromedical office in Denver—are funded exclusively out of ALPA’s National account. However, the vast majority of billing for outside law firms and consultants—including Cohen, Weiss and Simon (bankruptcy, collective bargaining, and representation legal services) and the Wilson Center (polling)—were incurred by and charged to applicable ALPA MECs. Expenses associated with other consultants—including Buck Consultants (actuaries) and Milestone, Athena and Peter J. Solomon (investment bankers)—were incurred exclusively by MECs.
The Bottom Line: Best in the World vs. . . . ?
Through 76 years of representing pilots, ALPA has assembled a team of pilots and staff unrivaled in their knowledge, expertise, dedication, and cost effectiveness. These resources are funded according to policy and reviewed by your elected representatives—line pilots whom you choose to protect your best interests. The resources you see, and the ones you never see, are provided through business practices created by pilots and run by pilots and are not available through any other single source. If you think you can do it better than ALPA, just ask the FedEx and Continental pilots. They found out the hard way.
Those who selectively highlight government reports and “grandstand” using figures that they don’t understand are not providing accurate information and are doing you a disservice...
I get enough ALPA propoganda in the mail thank you.
01-21-2008, 09:57 PM
#6
Gets Weekends Off
Joined APC: Apr 2007
Posts: 211
Propaganda indeed...there was a thread on here that listed the salaries of many of the paid employees of ALPA. I added the salaries of the first 67 people on the list, and the total came to $14,501,725. The average salary for those first 67 people came to $216,443. It looks as if the 1.95% goes a long way towards paying very nice salaries for those lucky enough to become employed at ALPA. There were many more people on the list that was posted, but I didn't want to spend any more time copying numbers into Excel and such (if someone know where that thread is please post the link. I couldn't find it).
One observation I have as an outsider...it says that ALPA gets $105 million dollars in revenue each year. $22 million goes to "flight loss" pay, at least $14 million goes towards salaries. That's $36 million out of $105 million. Let's say there is another $14 million in salaries that I didn't take the time to add. That brings the total to $50 million of expenses out of $105 million in revenue. If I was a member of ALPA, I would be questioning where the other $55 million in revenue is going. That is a lot of money, and after reading the above posts, I cannot see anyway that they could spend $55 million on the remaining items mentioned. Personally, I think they should be making some EXCEPTIONAL progress with regard to the numerous issues that face airline pilots today with $55(+/-) million in the bank. That's just an outsider's opinion.
One observation I have as an outsider...it says that ALPA gets $105 million dollars in revenue each year. $22 million goes to "flight loss" pay, at least $14 million goes towards salaries. That's $36 million out of $105 million. Let's say there is another $14 million in salaries that I didn't take the time to add. That brings the total to $50 million of expenses out of $105 million in revenue. If I was a member of ALPA, I would be questioning where the other $55 million in revenue is going. That is a lot of money, and after reading the above posts, I cannot see anyway that they could spend $55 million on the remaining items mentioned. Personally, I think they should be making some EXCEPTIONAL progress with regard to the numerous issues that face airline pilots today with $55(+/-) million in the bank. That's just an outsider's opinion.
01-21-2008, 09:58 PM
#7
La Familia Delta
Joined APC: Oct 2006
Position: B-717 FO / C-17 AC
Posts: 2,467
Originally Posted by ToiletDuck
1.78% gets you the IBT 747 
that .17% is going to put my kids through college lol.
that .17% is going to put my kids through college lol.
01-21-2008, 10:07 PM
#8
Banned
Thread Starter
Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
Originally Posted by wannabepilot
Propaganda indeed...there was a thread on here that listed the salaries of many of the paid employees of ALPA. I added the salaries of the first 67 people on the list, and the total came to $14,501,725. The average salary for those first 67 people came to $216,443. It looks as if the 1.95% goes a long way towards paying very nice salaries for those lucky enough to become employed at ALPA. There were many more people on the list that was posted, but I didn't want to spend any more time copying numbers into Excel and such (if someone know where that thread is please post the link. I couldn't find it).
One observation I have as an outsider...it says that ALPA gets $105 million dollars in revenue each year. $22 million goes to "flight loss" pay, at least $14 million goes towards salaries. That's $36 million out of $105 million. Let's say there is another $14 million in salaries that I didn't take the time to add. That brings the total to $50 million of expenses out of $105 million in revenue. If I was a member of ALPA, I would be questioning where the other $55 million in revenue is going. That is a lot of money, and after reading the above posts, I cannot see anyway that they could spend $55 million on the remaining items mentioned. Personally, I think they should be making some EXCEPTIONAL progress with regard to the numerous issues that face airline pilots today with $55(+/-) million in the bank. That's just an outsider's opinion.
One observation I have as an outsider...it says that ALPA gets $105 million dollars in revenue each year. $22 million goes to "flight loss" pay, at least $14 million goes towards salaries. That's $36 million out of $105 million. Let's say there is another $14 million in salaries that I didn't take the time to add. That brings the total to $50 million of expenses out of $105 million in revenue. If I was a member of ALPA, I would be questioning where the other $55 million in revenue is going. That is a lot of money, and after reading the above posts, I cannot see anyway that they could spend $55 million on the remaining items mentioned. Personally, I think they should be making some EXCEPTIONAL progress with regard to the numerous issues that face airline pilots today with $55(+/-) million in the bank. That's just an outsider's opinion.
This is not a secret. The Department of Labor documents all this.
01-21-2008, 10:16 PM
#9
Che Guevara
Joined APC: Aug 2005
Posts: 6,408
Originally Posted by ghilis101
Theres a reason IBT is cheaper. They dont buy out any of the union officers' flying. we are in the same local as you and our MEC has to conduct all their union business on their days off. plus our legal help is weak at best, but still glad to have some sort of protection which has made a night and day difference at the place i work at.
Anyway you and I need to talk.
