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Republic Airways Holdings Inc. Message Board

  • dingdongbockchoy dingdongbockchoy Jan 31, 2013 11:38 PM Flag

    RJET - Below the Deck and Behind the Scenes

    An interesting read from the Pilot Union. Looks like troubles a brewin' and she (RJET) may blow apart soon....

    Is $12 million good enough?

    Crewmembers understandably want more information about the status of negotiations after last week’s session. The first thing you should understand is the Company presented its offer of $12 million for a first-year value as a “last, best and final offer.” Your NC did not put forward either of its proposals for the week as a last, best and final, but the Company did. And that was a total value proposal by RAH; whatever went into it, pay rates, any work rule improvement, couldn’t exceed $12 million for the first year.
    RAH outright rejected our proposals for all forms of premium pay, for cancellation pay and for duty rigs. And the offer of course did not include any retroactive pay for pilots.
    RAH made clear it would not make another proposal beyond that $12 million offer. The mediator ended the week and stated her plans for not having further meetings for now based on the parties’ positions— specifically that RAH had presented a LBF position. So every pilot has to decide if that $12 million “last, best and final” is good enough.
    One thing to consider is that the Company’s proposal falls far below just the loss of buying power in our pay rates from inflation. Since 2007, the total inflation effect on our pay rates has been 10.8%--that means we have lost that amount of buying power from our pay rates. Just to make up for that inflation deterioration would require $17.7 million for this first year value. While the Company fails to make up the effect of Cost of Living Increases, they have received Cost of Living increases for each year from their Code Share Partners. They have already been paid those same adjustments which they deny our pilots.
    On top of the inflation effect on pay rates, pilots have to pay out more money for health care premiums. A pilot having family coverage since 2007 would pay $3,826.08 more in annual premiums. Just making up for the loss of income due to increased premium costs to the pilot group would require $4.5 million for the first year.
    So RAH’s “last, best and final offer” barely makes up half the deterioration in our contract from increases in inflation and health care premiums. It would require a proposal of $22.2 Million so you would have the same purchasing power from your take home pay as in 2007.
    Bedford claimed the company offered the pilots 30% of available cash in their proposal. As we pointed out already, that is a false claim. The $40 million expected net cash available (cash after all other bills are paid) estimated by the Company in 2013 was already net of $6 million allocated to a pilot contract increase. So RAH only offered $6 million of $40 million (or 15%) of that cash to a new pilot contract. This says nothing about profit, only “Free Cash Flow”, and in 2013 the Company has publicly stated we will be in the $66 Million free cash flow and $80 Million profit range.
    And since 2007, the Company’s fixed fee operations have generated cash in the total amount of $584 million. Yet RAH will only allocate $12 million total to a new pilot contract.
    In our next communication, we will show that the Company’s December 2012 pay proposal would leave our pilot group behind other “regional” pilot groups. (The Company continually harps on us being regional pilots.) And that proposal had no work rule improvements in Article 3. Other companies which RAH wants to compare us to on wages have work rules like Minimum Day, Duty Rigs, and Trip Rigs which the Company refuses to acknowledge. So that puts their pay situation even further ahead of us.

    The Union made a proposal in response to the Company’s last, best and final offer that we believe is affordable to the Company. The IBT Economics Department has built its own model for costing our proposal and that’s the costing we have relied on. The IBT Economics Department has proven accurate in countless other proceedings, including Horizon and the prior Frontier bankruptcy. The Company’s claim that we are seeking more than its available cash is FALSE. And it shouldn’t surprise anyone that we have had disagreements on costing. Recent pilot contract disputes have gotten more bitter. The PNCL pilots had big fights with their company over costing. And, of course, the easiest way to say “no” as management is to inflate the cost of the union’s proposal.

    This is where each pilot needs to decide if the Company’s “last, best and final” is good enough. That $12 million is for any and EVERY item in the CBA. Any dollar for work rules, for example, would come out of pay rates. Any amount for retro pay would come out of pay rates. So the comps we cite above would just get worse as other pilot priorities are introduced to the Company’s proposal.

    Is it good enough? Don’t let anybody off the hook of saying, “Gee, I don’t know if $12 million is fair”—because that’s the only question before you. RAH won’t offer more right now. Anyone who doesn’t answer the question is dodging it.

    Is it good enough? We believe the answer is emphatically “NO!” Which side are you on?

    Craig, Gary, Jim, Dan, Matt, Carl, Dan and Eve

    Teamsters Local Union No. 357

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