Greetings,

Update on Contract Extension Discussions

Today, Tuesday, February 10, 2009, AFA agreed to send out for ratification the following proposal involving an extension of our current contract.  Management approached us with the extension question and we exchanged several proposals over the course of a two-week period.  As you may recall the original management proposal included an increase in the percentage of our contribution to the monthly insurance premium.  You will see in the outlined material below that we did not accept any increase to the 18% contribution nor to the 15% annual increase cap negotiated in our 2006 contract.  

While we did work diligently to achieve this final proposal for your review, the MEC is officially neutral on the extension. Your MEC felt that, in light of the current economic environment, we would be irresponsible not to give you the opportunity to decide for yourself whether the improvements in the proposal are a fair exchange for maintaining our current contract for two additional years.

We ask you to evaluate whether this approach and the associated changes work for you personally and vote accordingly.  To that end we have put together some historical information for your review as well.  That has been posted on our website and will be placed in your mailfile along with the actual contract language. You will be receiving a ratification ballot in the mail.  If the majority of those voting vote for the proposal the contract will be amended accordingly.  If the majority of those voting vote against we will begin the preparations for the traditional Section Six negotiations process, beginning negotiations this Spring.  This is a year earlier than our amendable date pursuant to our early re-opener language in Section 33.

If the proposal is ratified the changes to our contract will be:

Duration (Section 33):  Amendable date changed from May 1, 2010, to May 1, 2012.  We will still have an early re-opener, so negotiations would start on May 1, 2011.

Compensation (Section 21): Increases to all pay steps:  1.5% on May 1, 2010, and May 1, 2011.  This is in addition to the new Step 17 (2% higher than Step 16) effective May 1, 2009.

Insurance (Section 23): No changes to the formula for health insurance contributions.  The date in A. 2, 2010, which is associated with our current amendable date of May 1, 2010 will be 2012 to reflect the new proposed amendable date of May 1, 2012.  We have maintained the freeze on costs if we are still in negotiations after our new amendable date.

Profit Sharing (Section 29): Change from Variable Pay Plan (VPP) to Performance Based Pay (PBP).  Upon ratification, we will also receive the 2008 PBP payout retroactively.  VPP paid nothing in 2008; PBP will pay approximately $500 per $20,000 of W-2 wages (e.g., approximately $500 if you earned $20,000, $1,000 if you earned $40,000 and $1,500 if you earned $60,000).  This does not impact the profitability bonus, Section 21 P, eligible Flight Attendants will still receive that in years we meet the profit thresholds.

This process in no way affects the schedule for the re-ratification vote on PBS.  Sideletter 2 of the contract, which sets forth the re-ratification procedures, remains in full force.

The components of this proposal are straightforward but in the next couple of weeks, we will be available on posted days in all bases, as well as via system-wide conference calls to answer questions.  We will publish the schedule as soon as it is finalized.  In the meantime, if you have any questions or wish to join the debate, contact your local officers or visit www.alaskamec.org.  If you have not visited the website before, the login is very easy.  The user name is your arctic number and the password is afa.  There is a link at the top of the home page to our Discussion Board where you can share your thoughts on the proposal and process.

Thank you for your input throughout this process.

Kelle Wells            MEC President
Deanna Hill            MEC Vice-President
Renee Elson             MEC Secretary-Treasurer
Stephen Couckuyt            LECP ANC
Rene Celestin            LECP LAX
Cathy Gwynn            LECP PDX
Rick Johnson            LECP SEA