06-27-2016December 4, 2015
Members from the West Merger Committee spent this past week in Washington DC with our legal team preparing our rebuttal case. The rebuttal phase of the seniority arbitration hearings is scheduled for January 4-8, and 11-15, 2016, although it is possible the hearings will conclude without using all of the alloted time. The hearings will be held at the following location:
Hilton Washington
1919 Connecticut Avenue NW
Washington, DC 20009
We will have more information about the January hearing dates in the near future.
OBJECTIVE OVERVIEW OF THE POSITIONS
The first two weeks of the hearings, held this past September and October, were dedicated to the Committees’ “direct” cases. In the direct cases, each Committee presented its seniority proposal and evidence that supported its own proposal. Therefore, with the direct cases now completed, there is enough evidence on record to understand how each Committee developed its seniority proposal, and why each Committee believes its proposal meets the “fair and equitable” standard.
During the second two weeks of hearings, beginning January 4th, each Committee will present its “rebuttal” case to the arbitration Panel. In the rebuttal cases, each Committee will present arguments, witnesses, and evidence designed to explain why the other Committees’ proposals, and/or portions of them, do not meet the “fair and equitable” standard. Therefore, the rebuttal cases will focus on where the proposals differ.
In order to better understand the differences between the three proposals and more closely follow the rebuttal proceedings, we thought it would be helpful to provide you an objective summary the Committees’ proposals. A one page summary of the proposals is posted on our website (The America West Merger Committee), and a more thorough descripton of the proposals follows.
Nicolau Award As Starting Point
All three Committees have taken positions regarding whether or not the Nicolau Award should be used as the starting point to integrate the US Airways and American Airlines pilots:
West Committee
The Nicolau Award should be used as the starting point to integrate US Airways pilots with American Airlines pilots.
EPSIC
“[The] Arbitration Board has no authority to integrate the pilots of US Airways and American on any basis other than the three separate seniority lists in effect on December 9, 2013. And we believe that this proceeding will demonstrate the Nicolau Award to be an inequitable basis for the integration of the pilots.” EPSIC Pre-Hearing Brief pp. 46-47.
AAPSIC
The Nicolau Award should be used as the starting point to integrate US Airways pilots with American Airlines pilots.
Status & Category
This tenet of seniority list construction is used to create ratios based upon the number of jobs each pilot group brings to the merger. “Status” refers to either captain or first officer and “category” refers to an equipment type or equipment grouping. Generally a status & category list construction involves creating a number of status & category “tiers” ranked according to the desirability of the seat and equipment; e.g. widebody captain, narrowbody first officer, etc. and placing pilot positions in each tier on a stovepipe basis (i.e. the most senior pilots would be put in slots equal in number to the large widebody captain positions and pilot names would be put in those slots in declining seniority order irrespective of what position they actually held). Consider the following examples from previous arbitration awards:
Nicolau Award
Tier 1: A330 Captains & First Officers
Tier 2: B767/757 Captains
Tier 3: A320/B737 Captains
Tier 4: B767/757 First Officers
Tier 5: A320/B737 First Officers
Tier 6: Furloughees
Delta / Northwest
Tier 1: Widebody Captain
Tier 2: Narrowbody Captain
Tier 3: Widebody First Officer
Tier 4: Narrowbody First Officer
[Note: neither airline had furloughed pilots at the snapshot date]
United / Continental
Tier 1: 747CA, 777CA, 787CA, 350CA
Tier 2: 767/757CA
Tier 3: 321/320/319CA/737CA
Tier 4: 747FO, 777FO, 787FO, 350FO
Tier 5: 767,757FO
Tier 6: 321/320/319FO, 737FO
Tier 7: Furloughees
The parties in our case have proposed status & category tiers as follows:
West Committee
Tier 1: Large Widebody Captains (B777 & A330)
Tier 2: Small Widebody Captains (B767/757)
Tier 3: Narrowbody Captains (B737, A320, S80)
Tier 4: Large Widebody First Officers (B777 & A330)
Tier 5: Small Widebody First Officers (B767/757)
Tier 6: Narrowbody First Officers & E190 Captains (B737, A320, S80, E190CA)
Tier 7: E190 First Officers
Tier 8: Furloughees
EPSIC
Tier 1: Large Widebody Captains (B777 & A330)
Tier 2: Small Widebody Captains (B767/757)
Tier 3: Narrowbody Captains (B737, A320, S80)
Tier 4: Large Widebody First Officers (B777 & A330)
Tier 5: Small Widebody First Officers (B767/757)
Tier 6: E190 Captains
Tier 7: Narrowbody First Officers (B737, A320, S80, E190CA)
Tier 8: E190 First Officers
Tier 9: Furloughees
AAPSIC
Tier 1: Large Widebody Captains (B777 & A330)
Tier 2: Small Widebody Captains (B767/757)
Tier 3: Narrowbody Captains & Large Widebody First Officers
Tier 4: Small Widebody First Officers (B767/757)
Tier 5: Narrowbody First Officers & E190 Captains (B737, A320, S 80, E190CA)
Tier 6: 821 US Airways pilots including 116 E190 First Officers and 705 pilots from higher tiers
Tier 7: 576 US Airways “Third List” Pilots
[AAPSIC has not proposed a separate tierto account for furloughees.]
Highlights of the status & category proposals:
Both the West Committee and EPSIC ratio pilots in each tier according to the number of jobs each side brought to the merger as of the snapshot date. AAPSIC proposes a 75% premium for LAA pilots in each Tier. For example, although AA has 454 Tier 1 jobs versus US’s 180 Tier 1 jobs, instead of using a 454:180 ratio (approximately 2.5:1) in Tier 1, AAPSIC reduces US’s 180 Tier 1 jobs by 75% to 45 jobs, resulting in a Tier 1 ratio of 454:45, or roughly 10:1 in favor of AA.
All three Committees agree about the first two tiers: Large Widebody Captains followed by Small Widebody captains.
AAPSIC proposes combining Narrowbody Captains with Large Widebody First Officer, citing similarities in pay, bidding patters, and working conditions. The West Committee and EPSIC place Narrowbody Captains and Large Widebody First Officers in separate tiers, ranking Narrowbody Captains above Large Widebody First Officers.
EPSIC proposes placing the E190 Captain tier in between the Narrowbody Captain Tier and Large Widebody First Officer tier. Both the West Committee and AAPSIC propose combining the E190 Captain jobs with the Narrowbody First Officer jobs.
Both the West Committee and EPSIC ratio furloughees below all active pilots. AAPSIC does not treat furloughees separately, and argues that its pilots who have deferred recall from furlough pursuant to Letter T are on a de facto “leave of absence” and therefore should not be treated as furloughees.
AAPSIC’s bottom tier is comprised exclusively of US Airways “Third List” pilots. “Third List” pilots are pilots hired by US Airways after the US Airways / America West merger. AAPSIC’s proposal does not explain its rationale for this placement.
Longevity
Longevity is generally defined as a pilot’s date of hire to the merger snapshot date less furlough time, and this tenet is therefore much less complicated than status & category. Both “date-of-hire” and “length-of-service” seniority lists are examples of pure longevity-based seniority lists. Both the East and West Committee include longevity as a component in their proposed seniority lists, although the Committees calculate longevity slightly differently. AAPSIC’s proposal does not account for longevity at all.
Hybrid methodology
A “hybrid” seniority list is a combination of a status & category list and a longevity-based list. Creating a hybrid seniority list involves separately creating a status & category based list and a longevity-based list, and then merging them according to relative weighting of the lists. Consider the following examples from previous arbitration awards:
Nicolau Award
Although the Nicolau Award is largely a status & category list, Arbitrator Nicolau established the “supersized” first tier of 517 East pilots (and zero West pilots), based upon the number of A330 captains and first officers, to credit East pilots for their superior longevity and attrition.
Delta / Northwest
A status & category list, however, the arbitration panel provided for the greater longevity of the Northwest pilots by adjusting the status & category tiers to Northwest’s favor, and by utilizing a pull-and-plug methodology to construct the list.
United / Continental
A hybrid methodology, 65% allocated for status & category, 35% for longevity.
The parties in our case have proposed integration methodologies as follows:
West Committee
A 65% status & category, 35% longevity hybrid list, identical to that in United / Continental.
EPSIC
A 45% status & category, 55% longevity hybrid list, similar to that in United / Contintental but with greater weight for longevity.
AAPSIC
No credit for longevity.
Career Expectations
Pre-merger career expectations is a highly subjective topic, and is therefore frequently a heavily litigated topic in seniority integration proceedings. The parties have taken positions regarding pre-merger career expectations as follows:
West Committee
No adjustment to the proposal based upon career expectations. From the West pre-hearing brief, pages 32: “By reason of the competitive state of the airline industry following the Delta-Northwest and United-Continental mergers, neither American pilots nor US Airways pilots could legitimately assert that they had realistic distinct or superior stand-alone career expectations based on the economic health of their carrier. Therefore, there is no reason why the Board should place a ‘thumb on the scale’ in favor of either pilot group in weighing the groups’ respective status-and-category or longevity equities based on this factor.”
EPSIC
No adjustment to the proposal based upon career expectations. From the EPSIC pre-hearing brief, page 3: “The merger of American and US Airways is truly a ‘merger of equals’ with both airlines contributing their strengths to the transaction to create a single airline that is greater than the sum of its parts.”
AAPSIC
AAPSIC’s proposal provides for at least a one adjustment on the basis of AA’s superior pre-merger career expectations, in terms of: (i) a superior network; (ii) a superior fleet and growth opportunities; (iii) a superior competitive position; and (iv) superior compensation and benefits. The most easily recognizable adjustment in AAPSIC’s proposal for career expectations comes in the form of a 75% adjustment of its proposed status & category ratios, as explained on page 83 of the AAPSIC pre-hearing brief: “[A]cross the board, jobs at American in a given category and status were more valuable than jobs in the same equipment category and status groupings in either the East or West operation, based on the pay, flying opportunities and other working conditions associated with those jobs . To take the additional value of the pre-merger American jobs into account, the AAPSIC adjusts the status and category rankings by moving the American Pilot jobs in each of the foregoing category and status groupings upward vis a vis 75 per cent of the US Airways Pilots in the same original category and status grouping.”
Ostensibly, AAPSIC’s proposed Tier 7, reserved for all US Airways “Third List” pilots, is also based upon the premise of superior career expectations.
Widebody Protections (Fences)
Following are widebody protections from previous arbitration awards:
Nicolau Award
Reservation of 161 A330 Captain positions and 262 A330 First Officer positions for East pilots, expiring at the sooner of: (i) 4 years following the date of the award, or (ii) a change in the mandatory retirement age from 60 to 65.
Delta / Northwest
For the period of five (5) years beginning with the first bid period after the issuance of the Single Operating Certificate (SOC), no pre-merger Northwest pilot may be awarded or displaced to a vacancy on a B777 aircraft or category and no pre-merger Delta pilot may be awarded or displaced to a B787 or B747 vacancy.
United / Continental
For a period of five (5) years beginning with the Bid Period in which the ISL is first implemented, or until the carrier takes delivery of its twenty-fifth (25th) B787 aircraft, whichever occurs sooner, no premerger Continental pilot may be awarded a Captain or First Officer vacancy on a B747 or A350 aircraft or displaced to one and no premerger United pilot may be awarded a Captain or First Officer vacancy on a B787 aircraft or displaced to one.
The parties in our case believe that their list construction largely obviates the need for additional conditions and restrictions, and have proposed only the following widebody protections:
West Committee
None. However, “out of fairness and a concern for parity, if AAPSIC proposes that a fence be imposed for the B-787s that were on order for American Airlines, and if the Panel is inclined to impose that fence, the West Committee proposes that a fence be imposed for the A-350s that were on order for US Airways for the same duration as any fence on the B-787 but commencing on the date that the Company issues the first vacancy bid for the A-350.”
EPSIC
A. For a period of five years beginning with the Bid Period in which the Integrated Seniority List is first implemented, Group 4 Captain positions shall be first awarded to Legacy American Airlines pilots and Legacy US Airways (East) Pilots in a ratio of 2.48:1 so as to maintain a minimum number of Group 4 Captain positions of 454 among Legacy American Airlines Pilots and a minimum number of 183 Group 4 Captain Positions among Legacy US Airways (East) Pilots. Any Group 4 Captain positions in excess of the number required to maintain these minimum numbers of positions will be governed by the ISL and any applicable bidding conditions under the JCBA. These minimum numbers of positions shall be maintained in the event of a system reduction of Group 4 Captains. In the event of a system reduction of Group 4 Captain positions below 637 positions, reduction of Group 4 Captain positions shall occur among Legacy American Airlines Pilots and Legacy US Airways (East) Pilots in a ratio of 2.48:1.
B. For a period of five years beginning with the Bid Period in which the Integrated Seniority List (ISL) is first implemented, Group 4 First Officer positions shall be first awarded to Legacy American Airlines Pilots and Legacy US Airways (East) Pilots in a ratio of 2.46:1 so as to maintain a minimum number of Group 4 First Officer positions of 826 among Legacy American Airlines Pilots and a minimum number of 336 Group 4 First Officer positions among Legacy US Airways (East) Pilots. Any Group 4 First Officer positions in excess of the number required to maintain these minimum numbers of positions will be governed by the ISL and any applicable bidding conditions under the JCBA. These minimum numbers of positions shall be maintained in the event of a system reduction of Group 4 First Officer positions. In the event of a system reduction of Group 4 First Officer positions below 1,162 positions, reduction of Group 4 First Officer positions shall occur among Legacy American Airlines Pilots and Legacy US Airways (East) Pilots in a ratio of 2.46:1.
AAPSIC
Until January 1, 2020, Group IV Captain positions will be allocated between pre-merger American Pilots and pre-merger US Airways (East and West combined) Pilots, according to a ratio based on the proportions of Group IV Captain positions held as of the date on which the ISL is implemented.
Until January 1, 2020, Group IV First Officer positions will be allocated between pre-merger American Pilots and pre-merger US Airways (East and West combined) Pilots, according to a ratio based on the proportions of Group IV First Officer positions held as of the date on which the ISL is implemented.
Other Conditions & Restrictions Affecting Equipment / Base Bidding
AAPSIC
E. Former US Airways (East and West) Displacements and Stand-in-Stead
Until January 1, 2020, former US Airways Pilots shall be restricted in the exercise of stand-instead rights to pre-merger US Airways domiciles (PHX, PHL, CLT, DCA). Until January 1, 2020, former US Airways pilots displaced from the PHX domicile shall be restricted in the exercise of displacement and stand-in-stead rights to pre-merger US Airways domiciles (PHX, PHL, CLT, DCA).
F. Change in Mandatory Retirement Age
In the event that the mandatory age-65 pilot retirement age is increased while the Conditions and Restrictions set forth in paragraphs D. and E. above are in effect, those Conditions and Restrictions shall be extended by the number of years by which the mandatory retirement age is increased.
AIRLINEPILOT CENTRAL
