Changes in Green Book Contract vs. TCE

The following items are changes contained in TA3 measured against the baseline of the current Terms and Conditions of Employment (TCE) implemented by the Company on July 31, 2006. Changes that were in TA2 are included and starred items (**) represent changes that are new in TA3. Some items are improvements for the Flight Attendants and some are changes that were made to meet the court-ordered level of concessions.

· Restored Domestic Ground Holding Pay to “Yellow Book.”

· Restored International Ground Holding Pay to 50% pay and 50%** credit.

· Short Crew Compensation: Understaffing pay provision of $3 per hour to each working flight attendant when those flights operated without the number of flight attendants required by the company’s staffing grids or contractual minimum requirements

· Provision to allow International High Density Turns, excluding Trans-Pac, Trans-Atlantic, Inter-Europe and Inter-Asia. Example: MSP-SJU-MSP.

· Restored 4:15 minimum day (Yellow Book) and eliminated 4:15 averaging.

· Created ability to trade to zero.

· Trade lower in 6-hour increments.

· No patterns constructed in monthly bid analysis with a duty period following a red-eye segment.

· Restored “Yellow Book” Ready Reserve “Will Fly” assignment ahead of Regular Reserve.

· On-board rest provisions for international flights greater than seven hours but less than or equal to eight hours.

· Vacation accrual built back up beginning July 31, 2008, for a final accrual level beginning July 31, 2010, representing a 25% reduction in “Yellow Book” accruals.

· Reinstatement of “Yellow Book” sick pay provisions on July 31, 2007. (Note: no change to current accrual rate.)

· Increased sick leave accrual cap from 850 to 1200 hours; grandfathered Flight Attendants with more than 1200 hours.

· Improved Small Jet Letter of Agreement (Letter #8) by including provision for binding arbitration and receiving credit toward annual savings target.

· Improved Preferential Bidding System (PBS) provisions.

· Agreement to explore reciprocal jumpseat agreements within 90 days of ratification.

· Reinstate Quarterly Grievance Review

· One way trades and pattern drops below 70** hours reduce vacation and sick accruals.

· Reduced Purser buffer from 200% to 100%.

· Eliminated transfer expenses to new or re-established bases.

· Eliminated transfer expenses for voluntary transfers to HNL.

· Eliminated crew bottled water.

· Accelerated implementation of Language of Destination program.

· The new uniform package will offer one, instead of two, outercoats.**

· Eliminated Letter of Agreement 3, relinquishing right of AFA to be automatically recognized at Compass Airlines.**

· New Letter of Agreement to provide for Grievance Mediation **

· Agreed to bid for training prior to the monthly bid process for training that exceeds two days, or during or after the monthly bid process for all other training.**

· Agreed to phase out distribution of hard copies of monthly analysis and seniority list.**

· Longevity accrual ceases on the first day of leave.**

· Standby Pay only applies when Ground Holding Pay does not apply.**

· Duration: Amendable date remains December 31, 2011. All time served under the Terms and Conditions of Employment will be applied toward any “date of signing plus” (DOS +) changes from TA-2. Example: Under TA-2, sick leave pay returned to 100% for all hours on DOS +12 months, which would have been July 31, 2007. Under this agreement, sick leave pay will still return to 100% for all hours on July 31, 2007.**

· Modified international crew meals and introduced new domestic crew meals on all flights that would have had crew meals provisioned under Yellow Book language.**

· Reduce PBS monthly average line hour value from 87 to 85 hours.**

· Delay implementation of PBS until no earlier than April 2008 and provide Critical Bid Letter of Agreement for November and December until PBS is implemented.**

· Reduce monthly minimum to 70 hours.**

· Reserve scheduling improvements, including:**
o Open time assigned in accordance with number of RD days remaining.
o Reserve bidding from open board for trips that operate within days off and do not create a conflict with existing RD days. Trips picked up will be paid above monthly guarantee, but will not count toward monthly maximums.
o Established “magnet” and “premium magnet” days that allow Reserves to voluntarily move an RD day from an “excess” day to a “short” day.
o Establishment of “AM/PM Reserve” periods; allows Reserves to limit their required duty period to an AM or PM period. Number of AM and PM Reserves will be determined by the Company based on staffing needs.
o Established 35-in-7 Reserve tracking mechanism.

· Other Scheduling Improvements:**
o Pattern drops for lineholders matched to trip length and reserve availability.
o Premium pay for company designated patterns. Company may designate a 25% premium pay override to a pattern on the open board, available for pick up regardless of whether it projects the Flight Attendant over his/her monthly maximum.
o Elimination of monthly maximum for open board bidding which allows Flight Attendants to voluntarily bid for trips off the open board that would otherwise exceed monthly maximum.
o Improved sick leave make up provisions.
o Secured commitment to negotiate a cost neutral “split lines” program that will provide an opportunity for Flight Attendants to reduce the number of hours worked.
o Established variable bidding ranges (Low, Standard and High).
o Provided for “A Position” bidding following implementation of PBS when technologically possible.

· Established 600 Early Out Packages and guaranteed that 100 packages would have release dates prior to October 31, 2007. Established mandatory timing schedule for all 600 packages.**

· Surplus Severance Payment: Provided that savings due to reducing early out packages from 1200 to 600 (approximately $16.7 million) would be paid out to Flight Attendants in active status or on approved leaves of absence as of the ratification date of this agreement within sixty days of ratification.**

· Under-Subscription Payment: Provided that if fewer than 600 Flight Attendants bid for and are awarded early out packages, savings generated by such under-subscription will be paid out to Flight Attendants in active status or on approved leaves of absence on the last release date of the program. The Under-Subscription Payment will be made on the second check of the month after the last package is distributed.**

· Established an allowed claim in the bankruptcy proceeding in the amount of $182 million on the same terms as those extended to other unions.**

· Secured the right to sell 40% of the allowed claim should this agreement ratify at any point prior to the Company’s emergence from bankruptcy (subject to bankruptcy court approval).**

· Secured the right to establish a sale transaction for the remaining 60% of the allowed claim following the entry of an Order approving the Company’s Plan of Reorganization and following ratification of this agreement, if ratification occurs prior to emergence from bankruptcy.**

· Changed language in Section 29, Insurance to ensure that Domestic Partners who have been married pursuant to state law automatically qualify for dependent coverage upon submission of a valid marriage certificate.**

· Commitment to reduce pass travel charges for travel between HNL and the mainland for HNL-based Flight Attendants to domestic levels.**

· Miscellaneous items include VIP Charter Letter of Agreement (“Yellow Book” Letter of Agreement #56 changed from B-727 to A319/A320) and Satellite Bases Letter of Agreement.

· Reinstated Holiday Pay for Christmas, Thanksgiving and New Year’s Day in 2007 for life of agreement similar to 2006 Holiday Program. $100 on each of the three holidays and $50 on fourteen (14) other days in the holiday periods.**

· Reinstated Per Diem for single duty period patterns beginning December 1, 2008.**

These summary terms are subordinate to the language exchanged in proposals between the parties.