January 9, 2015

Dear Pilots:
Since I wrote to you on December 23, two issues have been raised by the APA that characterize our
leadership team as being unreasonable: the calendar day/long rate rig proposal made by APA on
January 3 and now the January 19 ratification requirement for the pay rates to be retroactive to
December 2. I want to give you our perspective on both issues:
Calendar Day
During negotiations in November, the union proposed calendar day. When the Company did not agree,
around Thanksgiving, APA instead proposed increasing the rig time, and we agreed to bring it up to 5:10.
We believed that issue was closed out with the union. Then, with the previously agreed January 3
deadline to retain retroactivity approaching, the union made the long rate rig (calendar day) proposal.
The Company looked at that idea but could not agree because the costabout $80 million per year
was too expensive on top of the almost $2 billion of economic improvements already included in the
Companys offer ($400 million per year on average). To put that $80 million per year in context, it is
roughly the same as an additional 3% pay increase.
We did commit to working to reduce the duty day rigs. There is no guarantee we can do so, and we
probably wont be able to solve everything. But we know this is an important issue to our pilots, we
dont like those trips either, and we would very much like to make those better. But the blunt
instrument proposal that APA made at the last minute was too broad, so we declined the offer.
January 19
This one requires a little history. Recall that the original extension agreement provided that the new pay
rates would be retroactive to December 2 if the JCBA was concluded (approved by the APA Board and, if
necessary, ratified) by December 31. During the week of December 15, the APA made an extraordinarily
regressive proposal to management after months of negotiations. We took this as a clear sign that
negotiations were over and we proffered for arbitration on December 23. On the same day, we
announced a company-wide 4% increase for all non-union employees below director level and for all
unions that had reached JCBAs. We communicated to our pilots that, as a result, our offer now included
pay rates 23% above our current scales. We also communicated that negotiations had ended but our
offer would remain open until arbitration began in late February.
On that day, per a request from APA, we agreed that the new pay rates would be retroactive if the
Board approved the Company proposal by a January 3 deadline and ratification was concluded by
January 19. Now, today January 9 APA has requested an extension to January 31 for retroactivity.
We again have declined and APA is again stating we are being unreasonable.

We disagree. We are not talking about retracting an offer if this deadline is not met. We are talking
about a deadline to maintain pay retroactivity. We did not allow the APFA this much extra time to
deliberate and retain retroactivity, and it is not fair to them or our other unions to allow the APA yet
again more time. The APA Board has known about the January 19 deadline for retroactivity since
December 23. And retroactivity could be achieved if the Companys proposal was approved by the APA
Board, without requiring ratification (as they proposed last weekend), before January 19.
Much of what we have learned in this negotiation is that, due to the history of labor relations at both
American and US Airways, there is significant lingering mistrust. Your new management team is
committed to improving that situation over time, but we can only build trust by doing things that are
trustworthy and that includes doing what we said we were going to do. We told APA the deadline for
retroactivity was January 19, and APA understood that timeline, and indeed assured us it was
manageable. If APA does now need more time, that is OK. So long as ratification is complete by January
31, the new rates would be effective with the February bid (the bid beginning January 31).
Summary
On a personal level, I must admit that Im disappointed with how this process has evolved. From
managements perspective, we are working hard to reward our pilots with something above and beyond
their existing contract because you all have earned it. Offering a mid-contract, $2 billion
compensation increase is something that has never happened at any company at any time that we know
of. Somehow, however, this has turned into a negative and divisive issue, so it's time to be done one
way or the other. While the negotiations are over, I personally hope our pilots ratify our offer because I
think you deserve the extra $2 billion, but should you all disagree and decide you prefer the current
contract, we will respect that decision.
Thank you very much for your continued commitment to American Airlines, and for your patience. It
has taken an enormous amount of work by APA and the Company to get to this point, but we finally
have a very good offer out to our pilots for a ratification vote. That is what we have been working
towards and now it is up to you to decide. One way or another, we will get through this, and be in
position to begin moving forward together. I, like you, am looking forward to that day.

Scott