american eagle airlines 1113(c) restructuring ...eagle.alpa.org/portals/25/amr bankruptcy/1113 alpa...

Prepared at the advice of counsel / privileged and confidential

AMERICAN EAGLE AIRLINES 1113(c) RESTRUCTURING PROPOSAL TO THE AIR LINE PILOTS ASSOCIATION

MARCH 21, 2012 TERM SHEET

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OBJECTIVE This Term Sheet sets forth the basic terms of the Company’s Section 1113 ( c ) Proposal on necessary modifications to the parties’ existing Collective Bargaining Agreement between ALPA and American Eagle Airlines (the “Basic Agreement”) in light of what the Company has determined is necessary to its successful reorganization. The parties will amend the Basic Agreement and related side letters of agreement, and execute such other documents as may be needed, to accomplish the following modifications. Items marked with an asterisk (*) in this term sheet are contingent upon a consensual Collective Bargaining Agreement, i.e. they will become effective as described only upon the effective date of a new Collective Bargaining Agreement between American Eagle and ALPA.

I. DURATION Section 30

Eight (8) years from date of signing, with an amendment round in 2016. SEE ATTACHMENT B

II. COMPENSATION

Hourly Pay Rates: Section 3.A,B

Captain Pay Scale

Cap: Section 3.A

Longevity Increases: Section 3.A,B

Captain Pay Scale Column Header:

Section 3.A.1

1. Base Pay Rates— Captains: Base rates will be reduced by 5% effective DOS First Officers: Base rates will not be changed.

2. The Pay Scale, in Section 3 of the CBA, which includes up to longevity step 18 for some equipment, will be capped at longevity step 15. All pilots on longevity steps 16 through 18 will be moved to and capped at longevity step 15 on the effective date of this agreement. Captains on longevity step 15 will be moved to step 14 on the effective date of this agreement.

3. Longevity increases for Captains will be frozen for 12 months from DOS. Example: Assuming a DOS of July 1, 2012, Captains on step 10 on DOS, scheduled to move to step 11 on November 1, 2012, will remain on step 10 until November 1, 2013 and will then move to step 11.

4. The Captain’s Pay Scale will be modified such that the column containing “60-70 Seat Turbojet” will say “60-76 Seat Turbojet” and the column containing “60-70 Seat Turboprop” will say “60-74 Seat Turboprop.” SEE ATTACHMENT A

5. Reinstate former turboprop rates on 40-59 seat aircraft.




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Guarantee: Section 3.C.1

Reserve Guarantee: Section 3.C.2

Value of the Day:

IAI Adjustments: Section 3.O

Longevity-based Pay:

Section 3.A,B

New Equpiment: Section 3.N

6. Reduce regular, relief, and composite lineholder guarantee to 70 hours.

7. Reduce reserve guarantee to 70 hours.

8. In places where Value of the Day is referenced in the Agreement, the value will be adjusted to reflect the new guarantee.

9. Captains : a. No IAI Adjustments for 2013-2014 b. *For 2015 and subsequent years, the IAI Calculation will be

completed separately for Captains and First Officers with no floor, no ceiling and no minimum; Skywest will be included in the calculations.

10. First Officers a. No IAI adjustments for 2013-2014 b. *For 2015 and subsequent years, the IAI Calculation will be

completed separately for Captains and First Officers with no floor, no ceiling and no minimum; Skywest will be included in the calculations.

11. Captains will be paid based on seniority as opposed to the equipment that they operate for existing and future equipment. New equipment to the fleet will be contained within set ranges. (e.g. A new 60-76 seat jet aircraft type will become part of the existing pay band for 60-76 seat jet aircraft type)

Example: If the Company operates aircraft within three different Ranges or Bands, with Range A representing 20% of the fleet; Range B representing 60% of the fleet and Range C representing 20% of the fleet, the most senior 20% of the Captains will be paid at the Fleet Range A rates, the next 60% will be paid at the Range B rates and the most junior 20% will be paid at the Range C rates. Captains currently flying a higher paying equipment type at date of signing will be grandfathered into that wage Band unless displaced. The Bands with be “right sized” through attrition over time.

12. In the event that the Company is scheduled to take delivery of Turbojet aircraft in excess of 76 seats or of Turboprop aircraft in excess of 74 seats,




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Deadhead Pay: Section 3.J

Long Term Training

Pay: Section 3.L.2.c

Per Diem: Section 5.B

Touching Leg: Section 8.B.1.b

Profit Sharing:

the Company and the Association will meet to negotiate the rates of pay for such aircraft. Negotiations will commence within 30 days of the announcement of the deliveries. If no agreement is reached within 90 days, Section 3.N.2-4 will apply with the exception that the basis for determining the new rates of pay will be the weighted regional industry average of airlines within the regional industry as defined in Section 3.O.2 plus Skywest, with the weighting based on the number of aircraft, within the seat range for which such aircraft are configured, in operation at the regional carriers used in the calculation. Such new equipment might comprise a new Pay Band, as described in paragraph 10 above.

13. Change 3.J.1 and 2 such that deadhead pay is reduced to 50% of flight time.

14. Change Long Term Training Pay to 70 hours for the second and subsequent months.

15. Per diem will be reduced by $0.25 DOS to $1.65 per hour and the $0.05

annual increases will be eliminated.

16. Remove paragraph 8.B.1.b such that “touching legs” are not included in the bid adjusted line value.

17. *Implementation of the Profit Sharing Plan. SEE ATTACHMENT C

III. WORK RULES

Co-Domicile: Section 2

Preferential Bidding

System (PBS): Section 11.A

Home Based Lines: Section 11

1. Allow Metropolitan co-domiciles system-wide and create a co-domicile for New York comprising (LGA) and (JFK). SEE ATTACHMENT E

2. Implement a preferential bidding system (PBS) to replace current company-built bid lines. Revise/eliminate all provisions of the Agreement that are inconsistent with preferential bidding. A PBS builds individual custom work schedules based primarily on a crew member’s indicated preferences, avoiding conflicts with carry-over trips, vacation, training and other known events.

3. Implement Home Based Lines. SEE ATTACHMENT J




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Reserve Time Balancing:

Section 12.E Reserve Days on

Regular Lines: Section 11.B.2

Displaced for IOE: Section 11.E.2

Volunteer OT List: Section 11.H.9

Beepers:

Section 12.H

Training Event Cap: Section 15.I

Requirement to Qualify in Turn:

Section 15

Recurrent Bidding: Section 17.A.2

Cancelled Training:

17.L

Distance Learning & Homestudy: Section 17.E

Additional CBT Training:

Section 17.E

4. Reserve assignments will be assigned based upon a time-balancing system, respecting proffers when possible.

5. Remove paragraph 11.B.2 such that regular and relief lines may contain reserve days. SEE ATTACHMENT F

6. Change language under 11.E.2 such that a pilot who is displaced for IOE has an obligation to check his schedule until 12:00 each day before any day on which he has been displaced.

7. Change language in 11.H.9 such that the obligation for the company to poll the Volunteer OT list prior to using reserves is removed.

8. Remove language referencing TDY Beepers.

9. Limit voluntary training events after new hire training to a maximum of one.

10. Add language requiring first officers who have completed five (5) years of service to exercise their seniority to bid a captain status when they are of sufficient seniority to hold captain at their domicile.

11. Remove language in 17.A.2 such that pilots no longer have the ability to

bid for their ground school schedules.

12. In cases where a pilot’s training has been cancelled and no open line flying is available, the company may assign reserve days in its place.

13. No pay for company required distance learning such as “Value of Respect” and “Safety Starts With Me”

14. For FAA Required Distance Learning—Revise language to clarify that: 1. Recurrent Training—25% of FAA Required Hours 2. Long-term training—Will be paid at Value of a Training Day vs.

Value of Trips Missed (e.g. 3.5 hours per day)

15. Additional CBT Training may be added to the training curriculum.




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Ground School Schedules Makeup

Time: Section 17.C

Supervisory Displacement:

Section 24.E

Check Airmen Compensation:

Section 25.B

Training Flexibility: Section 25

Line Rotation Program: Section 25

16. Revise language under 17.C.4.a-b such that a pilot will not be scheduled

for more than eight (8) hours of actual classroom training, except to make

up classroom training missed on the current or previous days of training,

in which case training may be extended to a maximum of nine (9) hours

actual training in any calendar day.

17. Change paragraph 24.E such that pilots who are displaced by a supervisor or manager are subject to reassignment pursuant to the same rules that apply for IOE displacement 11.E.2

18. Change 25.B.2 to be replaced with the following compensation chart:

1. Aircrew Program Designee – 95 hours 2. Check Airman – 90 hours 3. Instructor – 85 hours 4. Any of the above who is not line-qualified for three consecutive

months will have his guarantee reduced by five (5) hours 5. Value of the Day will be adjusted to reflect the new guarantees

19. Check Airmen who are displaced from the American Eagle Training Center

begin new pay status (hourly guarantee and rate) upon displacement, while awaiting training as a line pilot.

20. Check Airmen leaving the training department: 1. Date of displacement: (going to training)

i. 70 hours at Check Airman rate ii. After completion of training—paid as line pilot (guarantee

and rate) 2. Date of displacement: (going to line)

i. Paid as a line pilot (guarantee and rate) 3. Example: Employee of 15 years who can hold CRJ CA.

i. Date of displacement: (going to EMB CA training) 1. 70 hours at CRJ CA rate 2. After completing EMB CA training – paid as EMB

line captain

21. Other personnel, not on the ALPA System Seniority List, may be used for flight training. Such personnel will be placed on an independent pay scale, to be determined by the Company.

22. Add the Line Rotation Program, contained in ATTACHMENT K




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Check Airman Mandatory Retirement: Section 25

23. Check Airmen will be required to retire upon reaching the FAA mandatory

retirement age, or, should vacancies exist, they may be hired as an instructor, as described in item #21 above.

IV. BENEFITS

401(k): Section 28.B

4-Tiered Benefit

System: Section 28

Vacation Pay: Section 3.H and

11.H.8

Personal Vacation Days:

Section 8.I

Vacation Accrual: Section 8.A.2

1. Reduction of company match to the American Eagle 401(k) plan by 2%. SEE ATTACHMENT G

2. Introduce 4-tiered benefit system, including: a. Employee only b. Employee plus spouse or domestic partner c. Employee plus child/children d. Employee plus family

3. Remove section 28.A.2.a-c and 28.A.3.a to provide for 4-tiered system.

4. A pilot electing to fly his scheduled vacation pursuant to 11.H.8, and a

pilot who chooses to pick up open time during his vacation, will be credited the value of his vacation plus the value of the trip he is flying, but will not be eligible for the open time premium.

5. Remove Personal Vacation Days (PVDs)

6. Eliminate one week of Vacation from each band, so that pilots will now be able to accrue vacation as shown in the chart below: Years of Service Calendar Weeks 1 Year 1 Week 5 Years 2 Weeks 15 Years 3 Weeks 20+ Years 4 Weeks

V. SUCCESSORSHIP/ SCOPE

Section 1

1. See Attachment H




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VI. MISCELLANEOUS

Calendar Month: Section 2.G

Me-Too Clauses: Section 28.E

New Hire Classes:

Section 4.E.2

Flowthrough Incentives:

1. Modify the current contractual month definition to allow the Company to

designate June a thirty (30) day contractual month and April a thirty-one

(31) day contractual month at its discretion.

2. Remove all “me too” clauses

3. Remove paragraph 4.E.2 such that the Company gains the flexibility to

cancel new hire classes at any time.

4. *Provide incentives for Flowthrough pilots. SEE ATTACHMENT D



MARCH 21, 2012 ATTACHMENT A—PAY SCALE

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Captains

Years of

Service

92% of 50-59 Seat

Turbojet

96.3% of 50-59 Seat

Turbojet

50-59 Seat

Turbojet

60-76 Seat

Turbojet

1

$56.84

$59.49

$61.78

$65.03

2

$58.54

$61.28

$63.63

$66.96

3

$60.30

$63.12

$65.54

$68.97

4

$62.08

$64.98

$67.48

$71.07

5

$63.95

$66.94

$69.51

$73.14

6

$65.89

$68.97

$71.62

$75.38

7

$67.20

$70.35

$73.05

$76.87

8

$69.20

$72.43

$75.21

$79.17

9

$71.29

$74.61

$77.48

$81.55

10

$73.43

$76.86

$79.81

$84.00

11

$75.62

$79.15

$82.19

$86.53

12

$77.89

$81.53

$84.66

$89.11

13

$80.26

$84.01

$87.24

$91.81

14

$82.65

$86.51

$89.83

$94.54

15

$84.05

$87.97

$91.35

$96.13



MARCH 21, 2012 ATTACHMENT A—PAY SCALE

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Captains

First Officers

Years of

Service

20-39 Seat

Turboprop

40-59 Seat

Turboprop

60-74 Seat

Turboprop

Turboprop Turbojet

1

$42.27 $52.31 $59.31

$25.84

$25.84

2

$45.43 $56.75 $63.75

$27.76

$34.91

3

$47.17 $58.20 $65.20

$30.94

$37.90

4

$49.96 $59.69 $66.69

$34.12

$39.78

5

$51.86 $61.19 $68.19

$35.69

$40.79

6

$55.04 $62.64 $69.64

$37.28

$41.46

7

$56.67 $64.15 $71.15

$37.76

$41.99

8

$58.50 $65.62 $72.62

$38.37

$42.70

9

$60.52 $67.11 $74.11 10

$62.01 $68.57 $75.57

11

$63.69 $70.27 $77.27 12

$64.99 $72.70 $79.70

13

$66.27 $72.99 $79.99 14

$68.16 $74.49 $81.49

15

$70.27 $75.98 $82.98



MARCH 14, 2012 ATTACHMENT B—2016 AMENDMENT ROUND

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2016 Amendment Round Proposal

There will be an amendment round in 2016 to negotiate changes to the Eagle-ALPA Agreement. Negotiations will commence no later than March, 2016 and will continue for a period not to exceed 150 days. If a tentative agreement is reached by August 31, 2016, the ratification process must be completed by October 15, 2016. To the extent possible, negotiated contract changes will be implemented on January 1, 2017. If no agreement is reached by August 31, 2016, then the Company and the Association may each take 5 specific items to interest arbitration. The interest arbitration panel will consist of 3 neutral arbitrators and a representative from the Company and the Association. The basis for adjustments to the contract during this amendment round will be Eagle’s total pilot cost position relative to the average of the total pilot costs at the 2 large regional carriers (defined as carriers flying in the contiguous United States, providing regional feed to a mainline carrier flying two hundred (200) or more aircraft in their active service in the same seat range(s) as the Company) having the most competitive labor costs. Total pilot costs will include wages, benefits, productivity, and longevity. Any contractual provision with the exception of Section 1, “Scope” may be negotiated and/or presented at interest arbitration (if needed). The standard to be used in negotiating adjustments to the contract during the amendment round and in interest arbitration, if needed, will be the “industry standard” based on the weighted industry average (carriers to be included will meet the definition of large regional carrier as defined above), excluding American Eagle. The weighting of the calculations will be based on each large regional carrier’s aircraft in active service within the seat ranges of aircraft flown at American Eagle (i.e in the event that in 2016 there are 3 large regional carriers having 400 aircraft, 200 aircraft, and 200 aircraft in each of their active fleets, within the seat ranges flown at American Eagle, respectively, they would be weighted at 50%, 25%, and 25% in determining the weighted average calculation.) Should Eagle have achieved a more favorable pilot cost position, relative to the average of the two large regional carriers with the most competitive pilot costs, the value of all contract adjustments will not exceed the total pilot cost advantage. Should it be determined that Eagle has a cost disadvantage relative to the average of the two large regional carriers with the most competitive pilot costs, only those contract changes



MARCH 14, 2012 ATTACHMENT B—2016 AMENDMENT ROUND

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required to reduce pilot costs to bring Eagle’s cost down to that average will be required. If Interest Arbitration is required, the panel of arbitrators will be selected by September 15, 2016 and the arbitration will be scheduled no later than November 1, 2016. To the extent possible, any changes to the terms of the Agreement as determined through Interest Arbitration will be effective within 30 days of the Interest Arbitration award.



MARCH 21, 2012 ATTACHMENT C—PROFIT SHARING

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Profit Sharing

If Consensual Agreements are reached, American Eagle will provide a “first dollar” profit sharing

plan to be funded as illustrated in the chart below:

The amount of the profit sharing payment to each employee would be determined by dividing

the pool by the total salary expense of those participating in the plan; the resulting percent

would be applied to each individual as a percent of each individual’s W-2 earnings for the year

in which the profit sharing is paid.

Profit sharing payments will not be considered eligible earnings for a company matching

contribution to the American Eagle 401(k) plan.

Bracket # American Eagle

Profit Margin %

Profit Sharing Pool

1 0-2 5% of pre-tax profit within the bracket




5 8+ 25% of pre-tax profit within the bracket



MARCH 21, 2012 ATTACHMENT D—FLOWTHROUGH INCENTIVES

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Flow through assistance and incentives

Eagle Captains at defined pay steps, who accept flow through opportunities to AA or

leave the company for an OAL job, will be offered loans by the AAFCU to cover the

projected wage dip between Eagle Captain pay and first step AA First Officer Pay as

follows:

Maximum amount of the loan is equal to the average take-home pay difference

between current after-tax Eagle compensation and expected after-tax

compensation at AA

o Incorporates change in tax bracket; assumes no 401(k) contributions are made

by the pilot after employed by AA

Maximum amount of loan will vary by pay step and equipment. The loan amounts

shown in the table below are illustrative of the current anticipated pilot wage gap

for Eagle pilots accepting positions at AA at each of the below pay steps and

equipment. *The chart below to be completed when AA and Eagle have negotiated

rates.

Pay Step ATR CA EMB CA CRJ CA

12

13

14

15

Loan disbursed in quarterly draws over a maximum three-year period

The maximum amount that can be drawn in year 1 is 67%

Up to 83.5% of the total loan can be drawn in year 2

Up to 100% of the total can be drawn in year 3

o Payments will be made quarterly. The amounts of the payments will be

determined by the pilot and the credit union.

o Draws subject to employment verification

o Requires membership in good standing in the AAFCU

o Requires payroll deduction of loan payments; pilots going to OALs will have to

arrange for auto-deductions for loan payments

No principal payments due from pilots over the three-year draw period; interest

only payments during the initial three-year period will be reimbursed by the

company

Seven years to repay the loan after three-year draw period

After three-year period, pilot is fully responsible for repayment of loan and interest




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Variable interest rate of prime plus X.X% (fixed for three-year draw period, then

adjusted on a quarterly basis thereafter through duration of the loan)

Loan option (company contribution)

Eagle guarantees the loan and provides collateral deposit at AAFCU

Eagle covers losses above the risk AAFCU would normally assume

Eagle will reimburse pilots for interest payments during the three-year draw period

o Payments will be taxable income; pilot responsible for any taxes

o Payments will depend on schedule of payments to the AAFCU and the mechanism

for collecting funds from the pilot (TBD)

o No adjustment after loan is taken if interest rate changes

o Payments will not be eligible for 401(k) company matching contributions

Eagle will set up a streamlined program for loan applications with AAFCU. All Eagle

Pilots who are members in good standing with the AAFCU will automatically qualify

for the loans. (Only those pilots who have previously defaulted on an AAFCU loan

and who remain in default will be excluded from the loan program.)

o Pilots accepting loans will be required to complete all documentation required by

the AAFCU. The loan processing will be under the sole control of the AAFCU and

they may introduce changes to their procedures at any time.

o Pilots will be required to sign a release to allow Eagle management to be

informed of which pilots take advantage of this program, the amount borrowed

by each pilot, and which, if any, loans become delinquent or go into default. No

other data will be made available to the company.

Cash option

Pilots eligible to participate in the loan program have the option of not participating

in the loan program at all and receiving a one-time payment equivalent to the

amount of the interest they would have received from taking the loan package (see

table below for cash amounts based on the current interest rate of X.XX%, which is

subject to change) * The chart below to be completed when AA and Eagle have

negotiated rates.

Pay Step ATR CA EMB CA CRJ CA

12

13

14

15

For the 238, the lump sum offered will be determined by the effective interest rate

of the loan extended (or that would have been extended) to the first pilot accepting

employment at AA out of that group.




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o After the 238 have been exhausted, the lump sum amount will be determined

quarterly up to a maximum of 10% interest

In no event will the lump sum amounts offered be less than what is reflected in the

above table

This payment would be made in the final paycheck the pilot receives from Eagle

and would be subject to all applicable taxes and/or other deductions

The pilot will have the option to deposit the cash option into his 401(k), subject to

IRS tax limits.

o Payments will not be eligible for 401(k) company matching contributions

Other transition support for Captains transitioning to OALs:

Log book preparation services

Interview coaching

Preferential deals/discounts for simulator prep

Company is working on details of each of the above; more details will be provided

soon

Eligibility

Captains transitioning to AA or qualifying OALs

For AA flow-through: Full flow-through package available for Captains at or above

pay step 12

o Loan/cash amount will be based on the Captain’s current pay block or

grandfathered rate

For OA opportunities: Loan option or cash option initially available for step 15 only

but company may choose to extend those options to lower steps; other transition

support (logbook prep, interview coaching, etc.) available for Captains at or above

pay step 12, including those recently upgraded

Eagle pilots who are hired by AA outside of the 238 and 824 opportunities, for

eligibility and incentive purposes, will be treated equal to pilots pursuing OA

opportunities

Other

The Incentive Program will be made available up until the final pilot flows through

to AA under 824 agreement with the following exceptions:

o The program may be suspended if AE is in “significant financial distress” or

bankruptcy. Parties agree to define “significant financial distress” in language

writing process.

Eagle can increase range of pay steps at which pilots are eligible for the program at

any time without such a change becoming permanent

Eagle can modify the incentive package, by increasing its value, at any time after

the 238 Eagle pilots holding AA seniority numbers have been extended an

opportunity to accept a position at AA, without the change becoming permanent




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Process for OAL incentive packages:

The Company will determine on a month by month basis the number opportunities

(if any) to be extended to pilots desiring to obtain employment at OALs.

Once extended, the offer will remain in effect for 6 months, however the interest

rate may vary, depending upon the “prime + X.X%” quarterly computation by the

AAFCU



MARCH 21, 2012 ATTACHMENT E—CO-DOMICILES

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1. Pilots may be concurrently domiciled at airports designated as a co-domicile. JFK and LGA will be set up as co-domiciles (“JFK-LGA co-domiciles” or “co-domiciles”).

2. The Company will build published lines of time consisting only of trip sequences which start and end at the same co-domicile for the entire contractual month, including transition trip sequences. For example, an LGA co-domicile line of time will contain only trip sequences that originate and terminate in LGA. A trip sequence may include a surface leg(s) between the co-domiciles. Reserve assignments will also start and end at the same co-domicile.

3. At the pilot’s request the Company will adjust awarded Open Time sequences so that they start and end at the same co-domicile (i.e., JFK or LGA). An Open Time sequence may include a surface leg(s) between the co-domiciles.

4. A pilot whose trip sequence begins with a ground deadhead between co-domiciles will not be required to sign in at the co-domicile where his ground deadhead begins. A pilot must inform Crew Scheduling whether he will be in position for the ground deadhead or his first departure without utilizing the ground deadhead.

5. If a pilot’s ground deadhead at the completion of his sequence requires more time than what is originally scheduled he will notify crew scheduling of his arrival time at the co-domicile where his trip sequence originated and submit an RF message. A pilot is not considered to be in “rest” pursuant to the Basic Agreement when deadheading.

6. The Company will provide transportation between co-domiciles, if necessary, due to cancellations or schedule changes which cause a pilot’s trip to terminate at a different co-domicile than where the trip sequence originated. Such time spent in transit will not be considered rest. The Company may modify any surface deadhead between co-domiciles which originally was scheduled within fourteen hours of duty to exceed fourteen hours of duty. At the pilot’s option, he will be released at the co-domicile where his flying terminated. Company provided ground transportation will not require the pilot to “front” the money and later submit for reimbursement.



MARCH 21, 2012 ATTACHMENT E—CO-DOMICILES

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7. A reserve pilot who drives his personal vehicle to work may, upon request, receive parking passes for both airports in a co-domicile.

8. The reserve callout time for the primary airport of a co-domicile is 120 minutes and the callout time for a secondary airport is 180 minutes.

9. Pilots will be paid for all ground deadheads between co-domiciles in accordance with Section 3.J.

10. In addition to the commuter policy set forth in Section 11.S, the Company recognizes the difficulty of travel in major Metropolitan areas, and will consider such in evaluating late reports or missed assignments.

11. JFK and LGA will be treated as a single domicile for all purposes except as stated herein.

12. Other co-domiciles may be created to include two or more airports within forty (40) miles of the primary co-domicile (e.g. EWR may be added to the LGA-JFK co-domicile.)



MARCH 21, 2012 ATTACHMENT F—RESERVE DAYS IN REGULAR LINES

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In some cases, regular and relief lines may contain reserve days. Examples of situations where a

regular line may contain reserve days may include but are not limited to the following:

1. When line values are such that they are below guarantee, reserve day(s) may be added

to normalize the productivity of a given line. For example, a line containing 56 hours of

line flying, may have one block of four reserve days added, to bring it to 70 hours.

2. Relief lines may become composite lines in cases where available open time does not

build a pure relief line.

3. In cases where training has been cancelled and replacement flying is not available for

the cancelled training days, a pilot may be scheduled for reserve.

4. When a pilot bids into conflict, the conflict may be resolved by changing the days in

conflict to reserve days.



MARCH 21, 2012 ATTACHMENT G—401(k)

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The Company will provide Employer Matching Contributions according to the schedule below:

Years of Service Company Match of Pilot Eligible Earnings

1-10 50% of up to 6% of eligible earnings for a maximum of 3%

11-15 66.6% of up to 6% of eligible earnings for a maximum of 4%

16-19 83.3% of up to 6% of eligible earnings for a maximum of 5%

20+ 100% of up to 6% of eligible earnings for a maximum of 6%



MARCH 21, 2012 ATTACHMENT H—SUCCESSORSHIP/SCOPE

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Company Scope Proposal—ALPA

A. CERTIFICATION—no change B. SCOPE

1. All flying performed on aircraft operated under the Company’s FAA operating certificate (hereafter, “Company aircraft”) in its scheduled airline service will be performed by pilots on the Pilots’ System Seniority list, in accordance with the terms of this Agreement. Except for the initial cadre of pilots required to operate and train on new aircraft, all flight training on company aircraft of pilots for service under the Company’s FAA operating certificate will be performed by pilots on the Pilots’ System Seniority List in accordance with the terms of this Agreement. As used in this paragraph,

“scheduled airline service” means all flying of passengers and freight on Company aircraft as reflected in the Official Airline Guide and any other schedule or timetable published (in print or electronically) by the Company, and all of the following activities performed in support of the Company’ scheduled airline service: charter flights, extra section flights, maintenance flights, ferry flights, test flights, flights involving the delivery of new Company aircraft, and high speed taxiing of Company aircraft.

2. Nothing in this Agreement shall be construed to limit the right of the Company to lease (in or out), sub-lease (in or out), purchase, sell, or otherwise acquire or dispose of aircraft as may be necessary from time to time to support the then scheduled services of the Company.

3. In the event all or a substantial portion of the Company’s fleet of aircraft is grounded as a

result of acts of God or by an agency of the United States government, the parties will promptly meet and confer to address the consequences of such grounding and the appropriate response thereto. The objective of such discussions will be to achieve a mutually acceptable response which will, to the maximum extent reasonable, protect the Company’s scheduled airline service without unreasonably burdening the pilots.

a. Should the parties fail to achieve such resolution within a reasonable time, then the Company may, as the sole exception to B.1., above, subcontract flying for a period not to exceed ninety (90) consecutive days, provided that such subcontract is only to the extent necessary to protect the Company’s scheduled airline service and there are not pilots on furlough or furloughed as a consequence of such subcontract.

4. All provisions of this Agreement will be applicable to any company which becomes a

majority owned subsidiary of the Company. (New definition in Section 2.D. shall read, “AMR EAGLE CARRIER”, “COMPANY” OR “COMPANIES” means AMR Eagle Holding Corporation and a carrier(s) owned by AMR Eagle Holding Corporation, including, but not limited to,




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American Eagle Airlines, Inc. or Executive Airlines, Inc. provided that in the event of a divestiture of any form from AMR Corporation, “AMR Eagle Carrier”, “Company”, or “Companies” shall mean the successor entity resulting from such a divestiture, in which case all references to “AMR Eagle Carrier”, “American Eagle Airlines”, “Executive Airlines”, “Company”, and/or “Companies shall be replaced with the name of the successor entity.

C. MERGER PROTECTIONS In the event that the Company acquires another air carrier, or is

acquired by another air carrier, and in either instance the acquirer plans an operational

merger between the Company and the other air carrier (i.e., the combination of all or

substantially all of the operations of the two carriers), the following provisions will apply:

1. Single Carrier Proceedings.

a. Within ninety (90) days of the closing of the corporate acquisition

transaction, the Union shall initiate proceedings before the National Mediation

Board (“NMB”) to determine the post-merger representative of the craft or class of

employees subject to this Agreement.

2. Seniority Integration Procedures

a. If the employees of both pre-merger carriers in this craft or class are represented by

the same organization, there shall be a seniority integration of the two employee

groups in accordance with the Merger Policy of their representative, if any;

b. Unless otherwise required by law or agreed to by the parties, seniority integration

procedures required pursuant to this sub-section shall be initiated no later than 90

days after the closing of the corporate acquisition transaction or no later than thirty

(30) days after the single carrier determination by the NMB, whichever is earlier, and

concluded within ninety (90) days thereafter.

c. If the employees in one of the two pre-merger carriers in this craft or class are not

represented, or if the employees of the two pre-merger carriers in this craft or class

are not represented by the same labor organization, or if they are represented by the

same labor organization, but that organization has no Merger Policy, there shall be a

seniority integration of the two employee groups in accordance with Sections 3 and

13 of the Allegheny-Mohawk Labor Protective Provisions (LPP);




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d. The acquirer shall accept the integrated seniority list, including any conditions and

restrictions, established through the organization Merger Policy or LPP proceedings,

as applicable, provided that such conditions and restrictions do not require the

displacement of any incumbent employee from a position then held, do not materially

increase the Company’s training costs, and do not result in retroactive monetary

liability on the part of either pre-merger carrier and do not require upgrade or

transition training of any crewmember(s).

3. Contract Integration.

a. The pre-merger collective bargaining agreements (or terms of employment for

unrepresented employees) of the two pre-merger employee groups in this craft or

class shall be merged into one (1) agreement as the result of negotiations between

the post-merger representative of the employees and the acquirer. If a fully merged

agreement is not executed within six (6) months from the date an integrated seniority

list is presented to the acquirer, the parties shall jointly submit outstanding issues to

binding interest arbitration. In such interest arbitration, the arbitrator will be required

to produce an agreement with terms and costs which do not exceed the industry

average for employees in this craft or class among the two large regional carriers

(defined as carriers flying in the contiguous United States, providing regional feed to a

mainline carrier flying two hundred (200) or more aircraft in their active service in the

same seat range as the Company) having the most competitive labor costs; provided

that the arbitrator shall be limited to the subjects of rates of pay, rules, and working

conditions and shall have no authority to create restrictions on management rights or

on the scope of business or business prerogatives of the Company, unless the

Company has agreed to such restrictions; and

4. Operations Pending Complete Operational Merger.

a. The acquiring Company in a merger transaction subject to this section shall have the

option to integrate operations in whole or in part prior to the final completion of the

operational merger, including common schedules, uniforms, livery and similar matters,

but shall not co-mingle the employees in this craft or class at any location until the

seniority integration procedures provided above have been concluded.

b. The acquiring Company in a merger transaction subject to this section shall also

have the option to maintain and operate the two pre-merger entities as separate




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airlines pending the integration of seniority lists and negotiation of a consolidated

collective bargaining agreement in accordance with this section.

5. Waiver of Merger Provisions.

In the event that the Company determines that the time limits contained in B.1, 2,

and/or 3 of this Section present an impediment to agreement to a transaction which is

otherwise in the best interests of the Company, the Company shall have the option to

waive the time limits in B. 1, 2, and/or 3, provided that the Company shall first meet and

confer with the Union about the proposed transaction and the possible waiver.

D. SALE/TRANSFER/LEASE OF COMPANIES’ OPERATING ASSETS The Company, AMR Eagle Holding Company, Inc. (the parent) to include its successor company, if any, or any Subsidiary of the Company, including but not limited to, American Eagle Airlines, Inc. and Executive Airlines, Inc. may sell, lease, or transfer an operating asset(s) to another air carrier or entity or otherwise dispose of an operating asset without limitation when the Company no longer requires such operating asset(s) due to an expiration or termination of an Air Services Agreement (“ASA”) to which the Company was a part; or when the transfer or disposition of the operating asset(s), in the ordinary course of business, is no longer necessary for the Company’s operations.

1. In the event the Company sells or transfers ten percent (10%) of its aircraft to another air carrier(s) in any twelve (12) consecutive month period which would result in the furlough of Company pilots, the Company will endeavor to obtain employment with the transferee for the number of pilots to be furloughed (if any) as a result of such sale or transfer. Any such Company pilots employed by the other air carrier(s) will be afforded recall rights under Section 16 of this Agreement.

2. In the event that the Company becomes a party to an ASA under which the Company is to provide flight operations in the service of another carrier, the Company shall not subcontract its rights or obligations under such ASA to any other carrier other than as permitted in Paragraph B. 2., above, or as required under the terms of the ASA.

E. DIVESTITURE In the event AMR determines to divest itself of all or substantially all of its interests in the Company this Agreement will continue to apply to the divested entity in all respects.

F. INCREASED FLYING OPPORTUNITIES




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The Company will aggressively seek to increase flying opportunities when it is economical, practical, and feasible to do so, including, but not limited to, bidding on opportunities to provide additional feed to American Airlines, Inc.

G. The Company shall not directly or indirectly (e.g., by creation by the Company of a parent entity) establish any new air carrier (alter ego or otherwise) and maintain it as a separate air carrier unless such separate carrier immediately becomes subject to this Agreement. The following definitions shall be added to Section 2 of the Eagle-ALPA collective bargaining agreement: 1. The terms “flight operations” and “operations” shall mean the operation of aircraft by an

air carrier in revenue service or in support of such revenue service as required under an Air Services Agreement and/or Capacity Purchase Agreement with another air carrier or as scheduled in the “branded” service, if any, of the Company

2. The term “Operating Assets” shall mean any aircraft, route, slot, operating certificate, or gate owned by the Company and used in its Flight Operations.

3. The term “control” or “controlling interest” means ownership of securities that constitute and/or exchangeable into exercisable for, or convertible into more than fifty percent (50%) of another’s entity’s common stock or of the voting power of the other entity’s securities entitled to vote for the other entity’s governing board, or the power to elect a majority of the other entity’s governing board.

Definition of “AMR EAGLE CARRIER”, “COMPANY”, OR “COMPANIES means AMR Eagle Holding Corporation and a carrier(s) owned by AMR Eagle Holding Corporation, including, but not limited to, American Eagle Airlines, Inc. or Executive Airlines, Inc. provided that in the event of a divestiture of any form from AMR Corporation, “AMR Eagle Carrier”, “Company” or “Companies” shall mean the successor entity resulting from such a divestiture, in which case all references to “AMR Eagle Carrier”, “American Eagle Airlines”, “Executive Airlines”, “Company” and/or “Companies” shall be replaced with the name of the successor entity.



MARCH 21, 2012 ATTACHMENT J—HOME BASED LINES

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In months when staffing requires equalizing among the bases, the company has the option to designate

a certain number of “home based pilots” by status in the domicile where a shortage exists (“remote

domicile”) to be bid by pilots in the same seat and equipment out of domicile, where an overage exists.

Such pilots will be based “at home” for the month and provided with A-12 travel to and from their

sequences. These pilots must have sufficient seniority in the “remote domicile” to hold regular lines of

flying, in order to be granted the option to participate in the program, and will bid using their seniority

in the “remote domicile.” Crew Scheduling will maintain a list of minimum seniority for each status for

which the Company is offering “home based pilots” and in cases where a pilot has been awarded “home

based pilot” for a month, and does not have sufficient seniority to hold a line of time, Crew Scheduling

will build a relief line for such pilot.

Home based pilots will be given A-12 travel to and from the “remote domicile” from the nearest airport

to their home that has scheduled American Airlines service. Such pilots will be given A-12 travel to their

sequences on the day of the sequence whenever possible; however in some cases, a pilot may be

required to travel to the “remote domicile” the afternoon before a morning sign-in or the morning after

the completion of a sequence. Such A-12 travel, when it occurs on a day off, will be unpaid and will

remain a day off. When a home based pilot must spend the night in the “remote domicile,” he will be

provided a hotel room in the “remote domicile” at company expense.

Home based pilots will be subject to reassignment rules as a pilot based in the “remote domicile.”



MARCH 21, 2012 ATTACHMENT K—LINE ROTATION PROGRAM

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1. All line qualified Check Airmen may be required by the Company to “line rotate” to line flying status for at least one (1) calendar month during each year when assigned to the training department.

2. Check Airmen will be assigned to “line rotation” in seniority order within their classification of APD, Check Airman, etc.

3. Check Airmen will be paid line guarantee or actual hours flown at their current Check Airman rate. For example: An EMB Check Airman assigned to the training department, who has seniority to hold CRJ, would be compensated as a line pilot, per Section 3, when assigned to the “line rotation” in the following way. His hourly rate would be in accordance with Section 25.B.1, and the hours of pay would be determined by his guarantee or final bid or operational hours, per Section 3 for any month during which he was assigned to “line rotate.”

4. The number of Check Airmen placed on “line rotation” at any one time will be at company discretion.

5. Check Airmen assigned to “line rotation” will bid for monthly schedules using their respective seniority and will be considered DFW-based during their “line rotation.”

6. Check Airmen whose currently assigned airplane type is not based in DFW and is placed on “line rotation” will be treated as a “home based lineholder” in a domicile of his choice.

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