Release #: Vol. 84, No. 9
November 01, 2015
Weighing In: Preparing for ALPA’s Tomorrow
By Capt. Randy Helling, ALPA Vice President–Finance/Treasurer
I’m pleased to report that ALPA continues to successfully manage its operating margins. In reviewing the union’s year-to-date financial performance, its projected dues income for 2016, and its recently reduced exposure to risk from litigation, it’s clear to me that we’ve put our financial house in order. ALPA continues to pursue a fully packed agenda of contract negotiations and enforcement, aviation safety and security advocacy, and a host of other related endeavors, all while keeping its finances in the black.
I recently told ALPA’s Executive Board that if this sounds like a broken record from my other recent communications, allow me to point out that I would much rather restate this message than have to repeat phrases like “reengineering the union,” “tightening our belts,” and “shrinking our financial footprint.” It wasn’t that long ago that I was compelled to echo these sentiments, over and over again, during ALPA’s more trying times. Today, our union is in its best financial shape in more than a decade.
Having said this, I feel obligated to point out that the Association’s financial turnabout didn’t simply happen. ALPA’s pilot groups committed themselves to live within their budgets and focus on core priorities. Master and local executive council officers demonstrated financial discipline while still authorizing the resources necessary to provide our members with the products and services they have come to expect and deserve. This prudence, matched with an element of foresight, enabled our organization to succeed during both bear and bull market economies.
Looking forward, ALPA’s Executive Council has approved a 2016 budget based on an estimated $143.2 million in revenue. This figure constitutes a 5.75 percent increase over the total allotted for 2015, and ALPA pilot decision-makers sensibly decided that this surplus should be used to reinvest in the long-term health and welfare of the Association. This reinvestment includes three principal components.
First, ALPA is recapitalizing its Major Contingency Fund (MCF), bankrolling $1.6 million in 2016. This year, the MCF Review Committee examined and made recommendations on the operations and size of the fund to ensure its viability for near-term needs and for future generations of airline pilots.
Secondly, ALPA is allocating $1.1 to its wholly owned captive insurance company, Kitty Hawk. Established in 1991, Kitty Hawk provides insurance and reinsurance coverage for the Association related to fiduciary obligations for ALPA benefit plans as well as professional services, employment practices, and duty-of-fair-representation matters.
Kitty Hawk is an essential element of ALPA’s risk-management program, acting as a safety net to protect Association resources from litigation exposure.
Finally, ALPA’s leaders recognize the need to upgrade the union’s supporting infrastructure. Through Project AMBER, ALPA is modernizing its 20-year-old piecemeal software and data-storage network. Updates have not always been practical because of periods of financial challenge.
Project AMBER is being implemented in stages, and we look forward to “going live” with the core elements of the new system during the summer of 2016. The first phase of this infrastructural renovation will address ALPA’s Finance and Membership Departments systems, along with an upgrade to the Infor expense-reimbursement program.
In due course, AMBER will enable the various components of ALPA’s infrastructure to interact more effectively while providing the network with a greater level of security. Most importantly, our members and pilot volunteers will have access to more of the information they need.
For nearly 85 years, ALPA leaders have demonstrated that they are both pragmatic and forward thinking, acknowledging that periodic downturns in the airline industry are inevitable. The union’s long-term strategic plan takes into consideration these cycles, helping to insulate the union from these fluctuations so that ALPA members can better focus on organizational priorities. With this kind of sound financial planning, the Air Line Pilots Association, International is better prepared to face future obstacles and uphold its legacy as the largest and most influential airline pilots organization in the world.This article is from the November 2015 issue of Air Line Pilot magazine, the Official Journal of the Air Line Pilots Association, International—a monthly publication for all ALPA members.