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August 29, 2000

 

 

 

Dear MEC Member:

 

Enclosed is the “Contract 2000 Highlights” document the Negotiating Committee has been working on. A special thanks to Hal, Wendy, Steve Senegal and Mike Abram, who did most of the writing.

 

Please keep in mind three things about this summary and what has been achieved in the tentative:

 

·                     First, this is a summary and it only speaks to issues the committee thinks would be interesting to most United pilots. Many issues are not covered in this summary.

 

·                     Second, some of the concepts described in this summary are complex and do not easily reduce to “bullet points” so expect much more explanation at the upcoming MEC meeting. Please don’t speculate about grey areas until you have all the facts.

 

·                     Third, we are working hard to write “contract language”, anticipate your questions, and to prepare a thorough presentation for the meeting. You will probably not receive additional information prior to the meeting.

 

Thanks and we are looking forward to seeing you soon.

 

Fraternally,

 

 

 

UAL-MEC Negotiating Committee

Steve Smith, Chairman

 

/mrs


Highlights of the Contract 2000 Tentative Agreement

 

Section 1: Recognition, Scope, and Career Security

 

Ø       Job Protections:

o        No–furlough clause applies to pilots who complete probation.

o        Captains, First Officers and Management Pilots in active status may not be reduced below greater of 9458 or number on date of signing.

o        Fleet size growth from 571 year-end 2000 to 633 year-end 2003; corresponding increase in required system block hours

§         Subject to “Substantial Economic Downturn”

·         Substantial Economic Downturn: 33 1/3% projected reduction in 12 months’ pre-tax earnings, excluding extraordinary debits and credits

·         Present book: 25% projected reduction in 12 months’ pre-tax earnings, no exclusion for extraordinary items.

o        All of the above subject to “force majeure” as in present book.

o        United pilots’ flying includes ferry flights that are not diagnostic test flights.

Ø       Corporate Protections:

o        United Airlines must remain a Domestic Air Carrier subject to Railway Labor Act

o        United Airlines must maintain its world headquarters, executive offices, and offices for senior Flight Operations personnel in the fifty United States

o        Successor of Company now includes purchaser of fifty percent of equity of Company or UAL or fifty percent of value of assets of Company (present book is “all or substantially all”) (exception for qualified ESOPs)

§         New right to serve a Section 6 notice if there is a Successorship Transaction

§         Right to raises for three years following amendable date in a Successorship Transaction increased from 4.5 to 5%

§         Air carrier purchaser must provide new fence protection for flying, pending operational merger.

o        Fragmentation protection: asset sale level required to trigger fragmentation protection reduced from 25% to 15%

o        Affiliate of Company includes purchase of 30% of equity (reduced from present book of 42%)

§         Exception: Company may purchase up to 20% voting equity and 20% nonvoting equity (unless Association consents to conversion to voting equity) in foreign carrier that is a partner under Star Alliance or successor network (or that commits within six months of purchase to become a member) but may not exercise Control in terms of board majorities or other types of Control.

Ø       Labor Dispute Protections

o        Labor Dispute Letter of Agreement: No commercial flight operations or training of pilots for United or any carrier during a lawful strike by the United pilots; special duration clause maintains letter through a strike until the effective date of the next general collective bargaining agreement.

o        No contractual prohibition on honoring lawful picket lines

o        Same terms as present contract on struck hotels, deadheading, and performing flying of another carrier involved in a lawful strike

Ø       International Protections

o        Company commits to join ALPA against cabotage and will work with ALPA to develop measures for protections if law is changed to permit cabotage

§         If cabotage occurs, United’s international partners cannot place designator code of the Company or a Company Affiliate on partners’ domestic flights in U.S. and partners cannot place their code on Company flights in domestic markets where both carriers operate

o        Company must demonstrate that international codeshare agreements do not reduce then-current hours of international flying (U.S. to foreign, and foreign to foreign) by Company, measured at conclusion of the calendar quarter after implementing the agreement

o        Minimum growing Company international block hours: protection for 95% of growth from 511,538 hours in 2000 to 576,300 hours in 2003 and after.

§         Two consequences for failure to meet these numbers in a rolling twelve month period:

·         Growth of international code sharing ends until Company again maintains the required 95% growth level for a rolling twelve month period

·         If international code share partner has grown more than twice as much as Company in the same international market, then Company must add, as soon as practical, Company flights that would pass the Base Internal Rate of Return (BIRR) Test instead of an existing code share partner flight

o        Company may not remove trips from international non-stop markets served jointly with international partner unless it demonstrates that the Company trips do not pass the BIRR Test.

Ø       Revenue Sharing

o        No sharing of profits and losses for passenger revenue with any carriers except foreign partners that are members of Star Alliance or successor alliance

o        No sharing of profits and losses for cargo with any carrier except Feeder Carriers

o        Strict rules on sharing of profits and losses with foreign partners:

§         Antitrust immunity

§         Costs for calculating profits exclude employment costs

§         Profits and losses subject to sharing are incremental to the profits and losses prior to the profit-sharing agreement

§         The Company’s annual share of profits and losses from flight operations under the agreement cannot exceed its share of ASMs under the agreement

§         Under each agreement, Company must maintain at least the base line ratio (proportion) of ASMs in markets covered by the agreement as it had at beginning of agreement

§         Target base line ASM ratio is 65% divided by the number of carriers in the agreement. For example, if there are four carriers in the agreement, Company’s target base line ratio is 65% times 25% or 16.5%. If Company does not maintain at least that proportion of ASMs under the agreement, then it must add within a year all the flights in the market until it reaches its target.

·         Exception for markets where no route authority if Company has made good faith effort to obtain the authority

o        Star Alliance flights may include the Company’s Branding as part of a Star Brand if placed in an inferior position to the Brand of the operating carrier to indicate that the flying is not being performed by the Company

Ø       Feeder Flying

o        The absolute number of captains plus first officers cannot, as a result of Feeder Flying, fall below the number on date of signing of agreement.

o        Feeder Carrier may not initiate new trip in market served by the Company in the prior 24 months unless the Company can demonstrate that a new Company trip in the market instead of the Feeder Carrier trip would not pass the BIRR Test.

o        Company may not remove a scheduled trip from a market served by a Feeder Carrier unless the Company demonstrates that the trip to be removed would not pass the BIRR test in the absence of all Feeder Carrier trips scheduled to depart within 30 minutes of the Company trip.

§         Under Present Book, the above two BIRR Test were not conducted in the absence of Feeder Carrier Flying in the market involved.

o        Feeder Carriers cannot operate between current and future “Key Cities” (which consists of Company hubs and DCA, MIA, LGA, EWR, JFK and SEA) and, without limitation to the foregoing, may not operate between pilot domiciles or between a Key City and a pilot domicile unless the Company demonstrates that a Company trip in the market instead of the Feeder Carrier trip would not pass the BIRR Test.

§         Same present book markets of IAD-LGA, IAD-EWR and IAD-JFK listed as exception to the above, i.e., Feeder Carriers are permitted to operate small jets (50 seat maximum, see below) in these markets up to 38,200 block hours (present book is 29,200 block hours).

o        Feeder Carriers as a group must schedule at least 90% of their non-stop flights into and out of hubs, gateways and 3 other airports (present book is 94% into and out of hubs and gateways). Also, up to 5% of these flights may have intermediate stops up to 2 hours as long as it originates or terminates at one of these airports and maintains a single flight number and aircraft for all legs of the flight.

o        At least 80% of Feeder Flying non-stop flights must be on routes of 850 nautical miles or less (present book is at least 90% on routes of 800 nautical miles or less).

o        Feeder Carrier ASM Ratio per present book.

o        Feeder Carriers may operate the following type of aircraft:

§         Small jets certified in the U.S. for 50 or fewer seats.

§         Turboprop or prop aircraft certified in the U.S. for 78 or fewer seats (present book is 75).

o        Small Jet numerical limits:

§         The Company must maintain 451 narrowbody aircraft of at least 100 seats (“Large-Gauge Narrowbody Aircraft”) to permit Feeder Carriers to operate up to 65 small jets.

§         To permit more than 65 base of small jets in Feeder Carrier operations, the Company must maintain a base of 451 Large-Gauge Aircraft and 141 Widebody Aircraft.

§         Adding to base of 65 small jets linked to growth of Company operations or replacement of turboprops:

·         One more Company widebody for 5 more small jets; one more Company Large-Gauge Narrowbody for 3 more small jets; one Company 70-99 seat narrowbody for one more small jets.

·         Without regard to these ratios, Company can replace 150 current turboprops with small jets on a demonstrated one-for-one basis and replace Air Wisconsin Bae-146 aircraft with either (i) other BAe-146 or AVRO 85 with no more seats than replaced aircraft, (ii) aircraft certified for 85 or fewer seats, or (iii) two small jets.

Ø       Domestic Code Share: No change from present book, except potential replacement of Aloha Airlines.

Ø       Related Carrier Review Committee (“RCRC”)

o        RCRC monitors Company compliance with all of Section 1 (under present book, RCRC monitors compliance with the Regional Jet Agreement).

o        RCRC may include subcommittees.

o        RCRC can make recommendations to Company regarding strengthening the Company’s contractual relationships with Feeder Carriers and protecting the Company’s feed.

 


Section 3: Compensation

 

Ø       Trip protection for all trips beginning on or after the 20th of the month through the end of the month.

Ø       Hourly pay rates for 12th year Captains follows:

 

Effective Date

Snapback

4/12/00

 

4/12/00

 

5/1/01

 

5/1/02

 

5/1/03

 

5/1/04

B737-200

$156.38

$190.01

$198.56

$207.50

$216.84

$226.60

B737-300/500

 

$156.38

 

$190.01

 

$198.56

 

$207.5

 

$216.84

 

$226.60

B727

$166.10

$201.82

$210.90

$220.39

$230.30

$240.67

A319/320

$175.30

$213.00

$222.59

$232.60

$243.07

$254.01

B757/767

$182.80

$222.12

$232.12

$242.56

$253.48

$264.89

DC-10

$197.43

$239.89

$250.68

$261.97

$273.75

$286.07

DC-10F

$197.43

$263.79

$275.66

$288.07

$301.03

$314.58

B777

$206.25

$265.39

$277.33

$289.81

$302.85

$316.48

B747

$210.54

$270.61

$283.60

$297.21

$311.49

$326.46

B747-400

$222.27

$285.98

$302.04

$319.00

$336.92

$355.84

 

Ø       International Overrides pay based on actual performance for all international hours flown at the following rates:

 

o        Captains $8.00

o        First Officers $6.00

o        Second Officers $4.00

 

Ø       Night Override pay for all qualified domestic night flying performed at the following hourly rates:

 

o        Captains $15.00 per qualifying hour

o        First Officers $10.00 per qualifying hour

o        Second Officers $ 5.00 per qualifying hour

 

Ø       The line guarantee is 75 hours based on the new hourly rates.

Ø       During an irregular operation, the Company may request the crew to waive their contractually required rest in order to bring an aircraft back to a hub. If the crew agrees to waive they will receive 5 hours of incentive pay over and above all other compensation for the month.

Section 4: Expenses, Lodging and Transportation

 

Ø       Domestic hourly expense allowance:

 

Effective 4/12/2000 $2.00 per hour

Effective 5/1/2001 $2.10 per hour

Effective 5/1/2002 $2.20 per hour

Effective 5/1/2003 $2.30 per hour

Effective 5/1/2004 $2.40 per hour

 

 

Ø       International Expense override is $0.50 per hour above the domestic hourly expense allowance.

Ø       Uniform replacement program and new hire uniform at no cost.

 

Section 5: Hours of Service

 

Ø       Reserve Days Off for Domestic increased to 13 in all 31 day months.

Ø       Shuttle reserves will continue with 14 days off.

Ø       All domestic days off are holy.

Ø       Four months of the year the Domestic and Shuttle schedule cap may flex to 83/85 on a fleet by fleet basis (other 8 months remain 81/83). Guarantee is increased to 77 hours in flex months for the designated fleets.

Ø       Reserves will have the same schedule monthly flight and duty rig application as line holders.

Ø       Duty periods ending in a cross-town layover will have the driving time included in the duty time.

Ø       Minimum rest at hotel increased to 9 hours.

Ø       Duty rigs will be applied both on a schedule and actual basis and the pilot will be paid whichever is greater.

 

Section 8: Filling of Vacancies

 

Ø       27 month freeze reduced to 24.

Ø       Effective 6 months from the Date of Signing system wide reserve coverage will be increased as follows:

o        Captains: 17%

o        First Officers: 15%

o        Shuttle 12%

 

Section 11: Vacations

 

Ø       Annual allocation: 7% for 9 months, 6% for remaining 3 months.

Ø       A pilot will not be subject to junior manned vacation twice in the same month except for the last 2 months of the vacation year.

Section 12: Leave of Absence

 

Ø       Short Term Disability

o        55% of guarantee up to a maximum of 90 days.

 

Section 20: Allocation, Assignment and Scheduling of Flying

 

Ø       New Concept to cover open flying by offering the trips in seniority order to line holder pilots who have indicated their desire to be contacted. The pilot accepting the flying will have his line made legal after the trip is inserted in his line. He will be paid the greater of the assigned trip plus 50% of the credit value of that trip or the value of the trip or trips removed form his original line.

Ø       The company has committed to the following parameters on a system-wide basis to improve domestic schedules:

o        No more than 4% of IDs will contain ground times of 2 hours or more between flights within a single duty period.

o        No more than 6% of IDs will contain duty periods greater than 12 hours.

o        At least 55% of the turns in a duty period will be in the same aircraft.

o        At least 55% of the domestic lines will contain no more than 270 hours away from home.

Ø       Allow for improved line construction by widening the difference between the monthly schedule cap and the guarantee.

Ø       New Reserve Concept

o        Aggressive Pick-up provision

§         First come, first served basis.

o        Active Preference provision

§         Volunteer to go to top of the appropriate list.

o        Voluntary Short Call Out provision

§         Pilot may be assigned an ID that opens up 5 hours or less prior to departure ahead of pilots who have opted for the Active Preference or Traditional Systems.

o        Traditional Wait to be Called System

Ø       Rest

o        The Company may designate up to 4 rest periods per day in each fleet/seat/domicile for monthly preferencing. Reserves will be awarded a base rest period which will continue on a day by day basis unless changed as a result of a flight assignment.

o        When given a flight assignment the last 9 hours prior to check in time will be the reserve’s designated rest period.

o        Unless extended by the Company, the last 9 hours of a contractual rest period following a flight assignment will be the reserve’s designated rest period.

o        The Company will not call a reserve during his designated rest period unless no other reserves are available for assignment. A reserve will not be required to accept any assignment offered during his designated rest period.

o        In domicile/fleets that operate both domestic and augmented international flights, the Company may convert a reserve to a 24 hour international standby if he is the only reserve available to cover an anticipated open international ID in his domicile. This reserve will not be assigned to any domestic ID’s.

Ø       Reserve Assignments

o        Flying that becomes available between 0700 and 2300

§         All known open flying available for assignment following the Aggressive Pickup window will be assigned 24 hours before the scheduled departure time.

§         Flying that becomes available for assignment between 24 and 12 hours prior to departure time will be assigned as soon as it becomes available following the Aggressive Pickup window.

§         Flying that becomes open less than 12 hours prior to departure time will be assigned as soon as it is known to be open.

o        Flying that becomes available between 2301 and 0659

§         Flying available for assignment following the Aggressive Pickup window will be assigned 24 hours before the scheduled departure time but the assigned reserve will not be notified of the assignment until 0700.

§         Flying that becomes available for assignment between 24 and 12 hours prior to departure time will be assigned 12 hours before the scheduled departure time or at 0700, whichever is earlier following the Aggressive Pickup window.

§         Flying that becomes open less than 12 hours prior to departure time will be assigned so as to provide the reserve with a reasonable amount of time to report for the trip or at 0700, whichever is earlier.

o        A reserve returning on an ID which contains a last segment that is scheduled to arrive at his home domicile between the hours of 0100 and 0600 will not be assigned to another ID where the last segment is scheduled to arrive between 0100 and 0600 the following day, without his concurrence.

 

Section 22: Duration

 

Ø       The Agreement is effective from April 12, 2000 to September 1, 2004.

Ø       The Company or the Association may submit an opening letter 270 days prior to September 1, 2004.

Ø       If a Tentative Agreement has not been reached by June 1, 2004, the parties will jointly request the National Mediation Board release the parties no later than September 1, 2004.

 

 


International

 

Ø       An augmenting First Officer when displaced will not be reassigned to another First Officer position without his concurrence.

Ø       International reserves will have 13 days off in all 31 day months with one grouping of 7 consecutive Holy Day Off. The Company will use a non Holy Day Off to correct month end legality problems.

 

Retirement and Insurance

 

Ø       A-Plan

o        Increase the A-Plan multiplier to 1.50%.

o        Early Retirement Reduction reduced to 3%.

o        Pilot will receive A-Plan participation credit for approved unpaid maternity, paternity or adoption leave of absence. Additionally, all furlough time will be credited for participation.

 

Ø       DAP

o        Increase contribution to 11%.

o        First year pilots will be eligible to participate in the DAP from date of Hire.

o        Pilots will be allowed to make pre-tax contributions to the 401(k) portion of the DAP prior to consideration of ESOP flow back for the purposes of internal revenue code section 415(b) limits.

 

Ø       Medical Insurance

o        Wellness plan including coverage for PAP, PSA and hearing aids.

o        Years of Service requirement for company paid retiree medical reduced to 5 years.