Negotiations Update 2011/12/31

Unsuccessful Negotiations to Extend the Transition and Process Agreement for Pilots; CO Pilots to Participate in Profit Sharing for 2011

When United and Continental announced their merger in May of 2010, the Company and the union leadership representing Continental and United pilots agreed to a Transition and Process Agreement (TPA) outlining certain processes and protections for pilots during negotiations for a joint collective bargaining agreement. The TPA expressly provides that certain of these provisions and protections can be terminated by the Company at any time after Dec. 31, 2011.

In early December, the Company approached ALPA about extending a number of those protections and provisions of the TPA past December 31, 2011. The parties had a number of discussions during December related to the proposed extension and discussed a number of concerns including a claim by the United MEC chairman concerning violation of the status quo. The Company extensively researched the claim with outside counsel and determined the claim of a status quo violation to be entirely without merit. This week the Company provided its final extension proposal to Captain Jay Pierce and Captain Wendy Morse, chairs of the Continental and United MECs, respectively. The Company's proposal offered to extend, at no cost to the United pilots, certain key protections and provisions of the TPA beyond December 31, 2011, including:

  1. The no-furlough protections for United pilots, which the Company offered to extend through Dec. 31, 2012
  2. The flying ratio protections for United pilots, which the Company offered to extend through Dec. 31, 2012

As part of the proposal, the Company offered profit sharing to Continental pilots for 2011, payable in 2012. United pilots already participate in 2011 profit sharing. The Company also requested dismissal of two outstanding grievances filed by Continental pilots.

Captain Morse indicated that the United MEC did not agree with the offer by the Company of profit sharing to Continental pilots for 2011 because, as she stated publicly, "...any extra-contractual dollars received by the CAL pilot group should also be received by the UAL pilot group." Captain Morse demanded that the UAL pilots receive a bonus equal to the amount of profit sharing paid to CO pilots, even though UA pilots already participate in profit sharing.

This demand for the UAL pilots to receive twice the profit sharing payments as all other employees, including Continental pilots, was unacceptable to the Company and inconsistent with what United and ALPA agreed to in 2010 in the original TPA. Notwithstanding UAL ALPA's rejection of the TPA extension proposal and the termination of joint discussions to extend the TPA, the Company advised Captain Morse that it had no current intention to terminate the no-furlough and ratio protection provisions for the UA pilots in the original TPA at this time, although of course it reserves its right to do so at any time.

Notwithstanding the rejection of the joint extension agreement by Captain Morse, the Company and the Continental ALPA MEC reached an agreement yesterday that allows Continental pilots to participate in profit sharing for 2011. This agreement is consistent with the Company's preference that all co-workers participate in profit sharing so they can share in the benefits of the Company's success. The Continental pilots will now participate in 2011 profit sharing in February 2012, along with all other eligible co-workers.

Under the terms of the Profit Sharing Plan, the inclusion of Continental pilots in profit sharing will not affect the amount of profit sharing payments to other co-workers. The Company would like to thank Capt. Pierce for his leadership and constructive engagement on this issue.


Pilots Negotiations Updates: Archive