[The following letter was released by the DCA Council leadership on July 17.]
The 2nd Quarter Meeting of the MEC began last week on Monday the 12th of June and will continue this coming week at the Airport Marriott in Philadelphia on Tuesday June 20. Last week's business included election of the new Merger Committee, selection of our Merger Counsel, and a meeting with Messrs. Wolf and Gangwal.
The members of the Merger Committee are Randy Mowrey, who was on the US Airways Merger Committee during the Shuttle merger, Mike Cleary, who is the former Captain representative from Boston, and Todd Cardoza, Chairman of the Route Committee who worked with Mowrey on that committee before Mowrey left it to join the previous Merger Committee. We congratulate each of the new members of our Merger Committee and support them fully as they begin this difficult process.
The election process was a particularly frustrating one for many of us, however. Each of these new members was elected in a 7 to 8 vote of the 15 members of the MEC. The 7 members were, the 2 representatives each of Pittsburgh, Charlotte, and Boston, along with the First Officer rep from Philadelphia. The 8 members voting for another candidate were the 2 representatives each from Baltimore and Washington, the 3 reps from New York, and the Captain representative from Philadelphia. In each of three consecutive ballots these 8 members voted for Kim Snider, a current member of the Negotiating Committee whose background in negotiations, previous merger experience and track record in past testimony in like proceedings, qualified him best, we felt, for one of the positions on the Committee. Kim Snider was also a Pilot Neutral in the Northwest/ Republic Merger. On each of the votes, however, the roll call votes of the 7 reps were used to give the majority to the senatorial minority and the Committee was established. We move on from here. We were heartened by the overwhelming turnout of pilots who made themselves available for the election process. But, we were disappointed that negotiations with other members of the MEC bore no fruit to put any of these individuals in one or two of the available positions.
Several firms were interviewed for the position of Merger Counsel for the US Airways pilots. Attorney Dan Katz was unanimously elected to the position. Dan has been dealing with merger issues on behalf of the US Airways pilots for 12 years and brings with him a history of airline merger experience that spans decades in the industry.
After selection of the Merger Committee Messrs. Wolf and Gangwal came to speak to the MEC and the pilots in the audience. This presentation was made in open session and a follow-up closed session with the MEC was held thereafter. Nothing in the open session was new information that has not already been reported in the press. A statement from the MEC was read to Messrs. Wolf and Gangwal, which expressed concern over the lack of prior communication from Management to the MEC and the pilot group on this transaction. The problems this pilot group faces day to day in light of what they perceive to be a "changed Corporate Culture" was highlighted to them along with the challenge that we expect them to do better. At this point they began their presentation. The following are highlights of it: - Wolf interjected that they came here 4 years ago to a company with losses, a bankruptcy candidate, at least, in the press, and one that had significant operational improvements needed. The question was is there a place for mature midsize carrier with mature costs? No matter how well we addressed operational issues, we had to address the issue of size. Had to have a commercially viable platform to increase size. Made the decision to grow and have been on that course. Transaction facilitates this. - Stockholders will receive $60 per share, requires approval by AAA shareholders and govt. etc. - Requires that we get all necessary approvals from govt. and 3rd party consent from our liabilities because UAL will pick up our bills. - Yellow Jacket Acquisition Corporation acquires AAA; AAA becomes surviving carrier as wholly owned subsidiary of UAL. AAA then will be merged into UAL - YJAC will divest itself of certain assets (DCA) - Two year freeze on jobs after end of deal - AAA can terminate if deal isn't done by 12/00, either can extend to 8/01 - DCAir created by using PSA as certificate holder. Wet lease from UAL for 2 years extendable for another 2 years. 119 jet slots 103 prop slots at DCAir from DCA, and take over leases for ramp and facilities at DCA - Johnson has no flip restriction (Can't sell for short-term profit) - AAA can take up to 50 aircraft in 2000, 23 in 01, 34 in 02 After conclusion of the session the MEC continued with business and recessed until Tuesday June 20th.
The meeting will continue at the Marriott in Philly this Tuesday, and is scheduled to continue through Friday, June 23. On the agenda are several issues important to the pilot group including displacement rights and policy changes. We urge you to try to come to at least a part of the meeting if you're in the area to keep your finger on the pulse of the events as they continue to unfold.
The current bid, which came out on Friday, June 16, greatly affects the Washington domicile. Over the life of the bid, SEP - DEC, Metrojet at IAD is eliminated. 20 lines of time are added to the Airbus and an intermix of Mainline and Shuttle flying begins on the Airbus equipment in DCA. Lines of time on the 737-300 are reduced from 52 to 50. Those Metrojet pilots who are currently pay protected should remember that in order to retain this protection they must bid, and not be able to hold, all Mainline Capt positions in base if they are in their 1st 18months of the displacement to Metrojet. If you are in months 19 to 36 of displacement to Metrojet, you must bid all Mainline Capt positions in the system and be unable to hold one to remain pay protected. Washington will be seeing a lot of changes because of this bid. In the end, around 100 pilot positions will move elsewhere. Get out your contract and become fully aware of your responsibilities and protections as you bid.
Fraternally,
Don Baier , Chairman #138
Paul Hocking, Vice-Chairman #138
Mike Loxtercamp, Sec/Treas #138