Agreement in Principle Reached on Proposed Tentative Agreement 2.0

Today, your APA Negotiating Committee notified the Board of Directors that we have reached an Agreement in Principle (AIP) with American Airlines management on proposed enhancements to the Tentative Agreement. The AIP, including all related contract language, has been submitted to the Board for its review. The Board will convene a Special Meeting to consider the proposed TA 2.0.

If the Board approves the proposed TA 2.0, it will be subject to membership ratification to become our new collective bargaining agreement, with the Board establishing new schedules for the ratification vote and Road Shows.

As the Board noted on Sunday when they postponed the ratification vote on the original TA, they expected the process of reaching an AIP on a TA 2.0 to take days, not weeks, and tasked your Negotiating Committee accordingly. We worked diligently with our management counterparts to meet that timeline. This AIP includes the improvements to the current TA discussed by the parties last week, along with additional improvements. In the following list of the proposed changes, you will see that some items are contingent on ratification of the United Agreement in Principle and are noted as such. All items are contingent on an August 2023 ratification of the 2023 TA 2.0.

Ratification Bonus LOA

• ~21% Fully Pensionable Ratification Bonus: January, February, March, and April 2023 will now also be included in addition to May, June, and July 2023.

Hourly Pay Rates

• Snap-up Clause: Contingent on United pilots ratifying their agreement in principle by January 1, 2024, American Airlines pay rates will increase to match the United and Delta pay rates beginning during the contractual month after their respective snap-up clauses have been completed.
• Contingent on United pilots ratifying their agreement in principle, all AA annual pay rate increases will be adjusted from May 2 to the preceding January 1 of each respective year during the contract.
• The Long Range Narrowbody Pay band adjusted such that the hourly pay rates for block hours flown will be paid as a flat override equal to the difference between the Long Range Narrowbody Pay Band and the Narrowbody Pay Band and at 12th year longevity pay step for Captain and First Officer, respectively.

401(k) Direct Contribution

• Contingent on United pilots ratifying their agreement in principle, the increases to 401(k) contributions will adjust to January 1, 2024 and January 1, 2026.

Positive Space and Hotel Following Reassignment and Recovery Flying

• If a pilot is assigned Recovery Flying or reassigned flying that ends outside of the original sequence footprint and the pilot has no opportunity to commute to their home of record on that day on American Airlines or American Eagle, the pilot will receive:
  • Positive space travel to their home of record the following day; and
  • Will be provided a hotel room

International Override

• Captain: $7.00
• First Officer: $5.00

Per Diem – Adjustments

• Domestic: $2.85 (remains same from TA)
• International: $3.40
• Annual percentage process remains.

Medical Reimbursements

• Pilots will be reimbursed for procedures, tests, treatments, or examinations to regain a First-Class Medical certificate that are not customarily covered by insurance.
• $5,000 cap per procedure
• $10,000 lifetime cap

Cross-Town Expenses

• Reserve pilots in bases with co-terminal/satellite airports will be reimbursed for actual expenses up to $300 for travel to and from co-terminal/satellite airports (primary airport not included) for the purpose of duty.
• Applies to pilots based in domiciles with the following primary airports: DCA, LAX, LGA, MIA.

Extended Sick Leave Bank (ESB)

• Pre-loaded with 120 hours at time of creation
• ESB Accrual – Five hours per month up to 180 hours
• Lifetime cap of 540 hours
• Available for pilot to use as bridge to LTD
• Available for pilot to “plus-up” LTD payments up to 15 hours per month for up to 12 months
• Pilot must provide appropriate medical documentation to access ESB.

Medical Protections and Qualifications

• The Company may not require a pilot to undergo any medical procedure(s), other than that which is required by the FAA to maintain a First-Class Medical certificate.
• If a pilot does not meet a governmental travel requirement to operate to an international or domestic destination due to their vaccination status or for other medical reasons, the pilot will be bid restricted or removed from sequences to such destination(s) without pay protection.
• Pilots must self-report qualification status, including vaccination, to the Company.

Unaugmented Sequence Duty Limits

• Unaugmented allocated sequences will not be built with duty periods to exceed the lesser of the applicable FAR Table B minus 30 minutes or 13 hours.

Reserve Work Block Size

• Narrowbody Reserve block minimum size must be set to three days for bidding in all months, except for international statuses in bases for which there is also a domestic status for the same fleet (DFW/320/I, ORD/737/I, LGA/737/I).

Reserve “Show, No-Go” Pay

• Increased from two to five hours.

Reserve Voluntary Early Report Incentive

• When a Reserve pilot volunteers and is awarded a sequence that reports prior to 1000 on the first day following a duty-free period or planned absence, the reserve shall receive two hours of pay, no credit, above guarantee.

Maximum Duty Periods

• For allocated Domestic sequences, the number of duty periods in the sequence cannot exceed the number of calendar days of the sequence.

Jumpseats on New Aircraft

• New aircraft from the manufacturer must have a second jumpseat installed if manufacturer configuration option.

Life Insurance

• The Company shall provide eligible pilots with basic term life insurance coverage of $750,000. There is no age-related graduated scale.

Open Time Limit Heatmap

• Added to implementation timeline at no later than DOS 12 months.
• Will provide a live dynamic visual representation of OTLs on a color gradient scale.

Classification Date Adjustment Implementation

• Classification date adjustments will be made in a progressive order by month of hire.
• All adjustments will be completed no later than December 31, 2024.

Additions to the Post-Ratification LOA

• Evaluate for potential modification and interaction to pairing construction:
  • Enhanced narrowbody pairing distribution parameters
  • Unaugmented long-duty day RIG (10 hour 1:1)
• Supplement L discussions and potential modifications
• Adjustments to how sequences are withheld for training in conjunction with the implementation of Line Check Pilots

Thank you for your continued patience and support as we work to finalize this process.

Respectfully,

Chris, BJ, Adam, and Matt
APA Negotiating Committee