Merger Negotiations Background

The Joint Negotiating Committee (JNC) posted the Summary of Merger Agreements yesterday, and we realize there are many questions about the negotiations process. This communication addresses those inquiries. Questions about individual Merger Agreement provisions will be answered once we publish the full text language on Friday. We thank you in advance for your patience.

AS-VX Merger Agreement bargaining background

From the very beginning of the merger, Alaska Airlines (AS) management took the position there would be no improvements for the pre-merger AS (pmAS) Flight Attendants because they already had a collective bargaining agreement (CBA) in place. Management claimed they would only negotiate a strictly transitional agreement. Such agreement would simply incorporate the pre-merger Virgin America (pmVX) Flight Attendants into the existing CBA, and therefore would contain no improvements for the combined work group. Management insisted that because AFA did not have the same language in our CBA as the pilots’, management did not have to negotiate a Joint Collective Bargaining Agreement (JCBA) with us.

The JNC solidly rejected that approach. It was adamant that there was no deal unless all Flight Attendants benefited from this merger. After months of hard bargaining, AFA prevailed.

Merger Agreement highlights

This tentative Merger Agreement includes:

• AS pay rates for VX (converted at 1.13 TFP per block-hour);
• 4.5% increase to the entire AS pay scale and retro to 1.1.2018;
• Over 10.35% in compounded wage increases;
• Additional holiday: Christmas Eve, including actual or scheduled provisions;
• Two (2) additional Attendance Points reduction/credit;
• Increase in 401(k) Company match to 7.5% (@100%);
• Improved medical leave period of four (4) years;
• Five (5) minute grace period for MBL;
• Ground commuting protections that apply to all FAs (not just registered “air” commuters);
• Elimination of the 1/12 vacation reduction if there is no paid time in the month; and
• Immediate and ‘down-line’ enhancements for pmVX FAs.

Other airline mergers

Consistent with other mergers in the industry, pmVX FAs will transition onto the Alaska system over a period of time. Because of systems and technology constraints, Alaska Airlines cannot simply just combine the groups immediately. Pre-merger American Airlines (AA) Flight Attendants and pre-merger US Airways (US) Flight Attendants are still working under separate work rules even though their JCBA was reached in late 2014. The execution of the United agreement is proceeding faster, but full implementation is still many months away. Because of their complex negotiations situations, many Flight Attendants in the aforementioned mergers went several years without pay increases. One could argue that the relatively significant increases on the effective date of their JCBAs did not make up for the years of stagnant wages.

The merger most analogous to ours—in which a comparatively larger group merged with a relatively smaller carrier—was the AirTran (ATR)-Southwest (SWA) merger in 2011. Those merger negotiations resulted in no pay raises or other contractual changes for the SWA FAs.   The ATR operation was kept separate and individual groups of approximately 40 ATR FAs at a time crossed over the partition to SWA pay and work rules over a multi-year period. It took years to complete, kept the groups divided and denied pay and work rule improvements to the ATR FAs.

Bargaining rationale

An important consideration that made a “mid-term” JCBA an option is that AFA does not want to go into our next round of regular negotiations with a divided work group. Despite AFA’s best efforts to secure as many interim improvements for pmVX FAs as possible up to this point, the reality is they are currently working for sub-par wages and they are not protected by a full union contract.

This Merger Agreement clears a path for all Flight Attendants to:

• Be covered by the Alaska JCBA (effective date of ratification in early April 2018);
• Fly together under a fully integrated operation (currently estimated in March 2019);
• Experience the Alaska contractual work rules first hand for a sufficient period of time that everyone understands the value of those work rules; and
• Learn more about the Alaska bargaining history, bargaining objectives and related challenges.

This will provide a powerful platform for AFA to go into the next round of full negotiations (early opener in late 2020) as unified as possible in order to achieve the pay, benefits and work rule improvements that we all deserve.

In Solidarity,

Your JNC – MEC President Jeffrey Peterson, Jennifer Wise MacColl, Jamie Cogen, Lindsey Steele and AFA Senior Staff Negotiator Paula Mastrangelo

The roadshow schedule may be found in the February 3, 2018 ”Save the Date: Tentative Merger Agreement Roadshows” membership release. AFA anticipates voting will open shortly after the completion of roadshows in mid-March and will end in early April. Any pre-merger Alaska Airlines (pmAS) or pre-merger Virgin America (pmVX) FAs are welcome to attend any and all sessions. Please be aware that only AFA members in good standing may vote on the TA, so it is extremely important that pmAS FAs are current on their dues and pmVX FAs have completed an AFA membership application prior to the vote.