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Airline Division News, Week Ending December 13, 2014

Labor Scores Big Victory for American Airlines Employees

Labor scored a big victory this past week when Congress passed H.R. 2591 and sent the bill on for signature by President Barack Obama.

A mirror image of S.2614, the resolution extends the filing deadline provisions of the Pension Protection Act of 2006 that were included in the FAA Modernization and Reform Act of 2012. By extending the date to include the timeframe of the American Airlines bankruptcy employees who were harmed when their defined benefit retirement plans were frozen as a result of the bankruptcy filing, employees will be able to take their funds and redirect them to a qualified retirement plan with no tax penalty. Currently, they must consider the funds as taxable income.

“The process of getting the bill done was no easy feat and required tremendous dedication,” said Airline Division Director Captain David Bourne. "On the Senate side, great credit is due to Senate Majority Leader Harry Reid, along with Senators James Inhofe, Sherrod Brown and many others.”

“It took the dedication of APA President Captain Keith Wilson and the APA Government Affairs Committee headed by Captain Bob Coffman; who working with their government affairs advisors, held over 550 individual meetings with Congressional staffers to help ensure passage of the bill. I'd also like to thank CAPA President Mike Karn for his support,” he went on to say. “This is a great victory for our Teamster members and all the employees of American Airlines,” he concluded.

Airline Industry News

Governmental and Regulatory

There are about 7,700 or 7,800 more seats a day available to travelers departing from Love Field in Dallas than there were before the Wright amendment ended on Oct. 13. Analysts say that the increased capacity, rather than lower fuel prices, has led to downward pressure on fare prices in the region.

Airlines, Industry and Labor

As more airlines retire their Boeing 757 fleet, many are seeking alternatives, especially for long-range flights.

An arbitration board approved a collective bargaining agreement between American Airlines and its flight attendant union. The five-year contract covers more than 24,000 flight attendants working at both American Airlines and US Airways and includes lower pay raises than the tentative agreement.

The merger of AirTran with Southwest Airlines has boosted Southwest's presence in the market, giving it 21 cities, including seven international markets in Central and South America. As Southwest fully integrates AirTran, the carrier is expected to return to higher capacity rates in 2015, industry experts say.

As American Airlines and its 15,000 pilots continue their efforts to negotiate a new labor contract, US Airways pilots have emerged as a union constituency that is particularly skeptical of management.

Southwest Airlines expects to pay between $2.30 to $2.40 per gallon for fuel in 2015, according to CEO Gary Kelly. The price, however, could still fluctuate depending on whether prices continue to drop or rise again, Kelly said.