Greetings,

 January 29, 2009

Alaska management recently approached the MEC and asked whether we would be interested in extending the contract in exchange for wage increases.  After much internal discussion, we decided it would be irresponsible not to at least listen to what they have to say.  We made it clear that if we were unable to come to an agreement, or if the agreement failed to ratify, that we would then go into regular negotiations as set forth in Section 33 of our current contract.

Management gave us its opening proposal today.  It calls for a two-year extension; small raises and a gradual increase in health care costs and a change in our profit sharing by switching from the Variable Pay Plan (Section 29.A) to Performance-Based Pay (PBP).  We are awaiting additional information on PBP, but we do know that it will pay out for 2008, while the Variable Pay Plan will not.

We will be making our counter-proposal in the next few days.  Please remember that you will have the opportunity to vote on any agreement that may be reached, and that we are entering into these negotiations without affecting our right to engage in regular negotiations should they fail.  At this point, discussions are still in the exploratory stage.  We will keep you posted on any developments as they arise.

In other news, since Alaska posted a profit for 2008, we will have a new Step 17 on May 1, 2009, that will be $45.12 (two percent higher than the current Step 16).  This is great news for us and the Company.  Unfortunately, the profit margin was not high enough to pay the profitability bonus in Section 21.P.  But the raise is now part of the pay scale and will serve as the starting point in negotiations—both on the extension and in regular Section Six negotiations.

Please let us know if you have any comments, questions or concerns.

Kelle Wells, MEC President, and your MEC/LEC Officers.