Airline Division Week In Review April 19, 2014

Airline Industry News 

Tens of thousands of American Airlines Inc. retirees can relax, at least for a while — they won’t be required to begin paying their own health insurance premiums. 

Airline earnings for 2014 will be $1 billion or 5 percent lower than previously predicted as political tensions drive up oil prices and growth in emerging markets slows, the International Air Transport Association said. 

Despite unusually severe winter weather, analysts expect robust airline earnings for the first quarter. "Broadly speaking, we feel demand trends are good and we expect highly upbeat commentary on earnings calls," said Hunter Keay, an airline analyst for Wolfe Research Inc.   

American Eagle changed its name to Envoy Air, but will continue flying planes with the American Eagle livery. "Our name change is driven by our need to differentiate ourselves from the other regional carriers flying as American Eagle," said Pedro Fabregas, Envoy president, in a letter to employees.  

Southwest Airlines plans to adopt a new maintenance program called EPIC for its Boeing 737s. EPIC will allow the carrier to perform overnight line checks on the next-generation aircraft instead of relocating the 737s to hangars for checks that take a longer time. 

American Airlines plans to reconfigure its fleet of Boeing 777-200ERs later this year, boosting the number of seats from 247 to 260. The carrier aims to enhance the overall travel experience for passengers by adding new seats, new configurations and new entertainment systems when the rework into a two-class configuration begins later in 2014.

Mechanics Dispatch - April 13, 2014

Resource Utilization Arbitration

The presentation of the union’s case began on Wednesday the 9th however it was not
completed. The hearing session concluded late that day with the parties reviewing calendars to
schedule future dates. As with the two subsidiary medical grievances, when the schedule is
known it will be reported in the Dispatch.

Negotiations Update

In late February and early March the economists from both sides met to thoroughly review the
respective terms of the last table positions of the parties. Those two meetings produced a
better understanding of the valuation of each side’s position. The result of the analysis was that
while much progress was made in the expedited portion of bargaining there are still significant
issues to overcome. Following these meetings, mediator Gerry McGuckin called the parties
together for a meeting of the principals. That meeting was originally scheduled for April 11th in
Chicago but was moved to Newark on the 10th.

Mediator McGuckin laid out the ground rules for going forward and informed the two sides that
they had now lost control of the pace of negotiations; the parties will now be bound by his
schedule availability. With twenty one open, active cases, the first date available in his schedule
was the week of August 18th through the 22nd.

The parties agreed that there would be an additional meeting for the leadership on May 7th
and 8th in Las Vegas, NV following the IBT Unity conference. The time from May to August will
be used to reconvene the steering committee to discuss the current state of negotiations and
to seek input for the full rank and file committee moving forward.

MRO Conference

The annual Aviation Week MRO conference was held in Phoenix last week. Attending for the
Division were Representative Chris Moore and Local 986 Business Agent Dave Saucedo. Chris
and Dave are working on a report which will be shared when complete. Two continuing trends
brought up at the conference that affect our craft are the limited number of people entering
the field and the rising rates in Asia which are increasing costs for widebody overhauls in that
region. Both of these trends will continue to be a tailwind for this craft for the foreseeable
future.

Cleveland Gate Consolidations

I received an update from Kan Trahan about the latest changes at CLE. The following is the text from his email...

In meetings with the city last week, UA will consolidate all it’s flying on Terminal C effective with the June 5^th schedule. We will utilize all the gates on C for the time being. This doesn't mean we won’t use Terminal D from time to time if needed as it will still be in working order with computers’ printers and facilities.  All the vendors will be closing or moving.

I have asked to have a couple gates configured to handle the B737’s verses towing to cargo when gate space is needed.  Utilizing Terminal D gates for remote parking gives us stairs, electrical power and ground heating and air conditioning. 

Also, a letter dated April 7th was sent out to Airport Operation co-workers to expect staffing reduction notifications beginning today. The letter also explained some of the job options available to IAM members including:

Gate Agent early out programs, new job vacancies available in IAD, DEN, and PHX, and job fairs & skills evaluations for those unable to maintain employment with United. The letter also emphasized United would continue to have significant mainline presence here in Cleveland. 

According to our leadership - Technical Operations remains unaffected by the staffing reductions and consolidations in Cleveland. I will update you as more information becomes available.