April 22, 2015 Negotiation Update

The parties met in Fort Lauderdale during the week of April 20th as directed by the
NMB. Immediately prior to arriving in FLL, the IBT leadership was informed by the
mediator that he had directed the Company to not present a proposal this week and that
the agenda for the session would be:
1. Complete the economic analysis of IBT March proposal
2. Industry comparisons presented by each side
3. TeamCare discussion
While the Committee was extremely disappointed with the last-minute directive the
mediator gave to the Company, the Committee complied with the orders of the mediator
rather than abandon the process. The Committee’s expectation was to fully utilize the
week to anticipate and strategize for the Company’s expected next pass. It is the goal of
this Committee, with the backing of the IBT, to achieve an industry-leading contract.
In meetings with the Company, Union economist Dan Akins gave a “State of the
Industry” presentation, which includes our ranking in the industry based on our proposal
in relation to our major competitors. This corroborates and supports our current
proposal as reasonable, in-line with the industry, and one that achieves our goal of
providing an industry leading agreement.
At the close of this week’s discussions, AD Director Bourne expressed to the Company
and the Mediator that it is the Company’s turn to pass a comprehensive proposal and
that it was the IBT’s expectation that a pass would occur in the next mediated session.
The parties are next scheduled to meet in Las Vegas May 10-14th.
Current Industry Comparison
As discussed above the following slides are a representative sample of the information
that was presented to the Mediator and Company; They show that:
The pay rate trend has been positive for mechanics at Delta and American since 2012.
In 2012 United Continental mechanics led the legacy trunk carriers and only followed
Southwest as illustrated below. American and Delta mechanics have both advanced
beyond United-Continental mechanics for 2015 rates. With the single carrier status ruling
by the NMB, American-USAir mechanics will begin a six-month negotiation period, which
will culminate in arbitration if the parties at that carrier are unable to reach an
Agreement. Given recent history at American there is no reason to believe the chart
below will remain static. Since 2012 Delta mechanics received in 2013 10.2%, 2014
3.5%, and in 2015 3.3%.

 Oil prices have adjusted dramatically downward which appears to be a medium term
trend.

Airline profits have soared as a result of several factors including consolidation and
lower oil prices.

To further illustrate the industry consolidation, the following slide breaks down the
percentage of revenue in North America that each carrier controls. Note this data is from
2013 but is not expected to dramatically change anytime soon.

The rank and file negotiating committee would like to thank our economist Dan Akins for
providing the above information.

Resource Utilization Arbitration Scheduled to Continue

The Resource Utilization arbitration is scheduled to continue on June 4th in Newark. As previously reported in the December 6th Mechanics Dispatch, the company requested and received a continuation of the case due to a change in their attorney. Since that date there have been several proposed dates but this is the first date that all parties could attend. After the hearing there will be an update on the process.