ALPA Adds Another Valuable Tool to Its ‘War Chest’
By Kevin Cuddihy, Contributing Writer
At the April Executive Council meeting, ALPA leaders approved final policy language for the Association’s Administrative Manual regarding the Major Contingency Fund (MCF), allowing for an important new use of funds from the Association’s “War Chest.”
The new Contract Implementation program, devised and recommended by ALPA’s Structure, Services, and Finance Review (SSAFR) Committee, provides funding to each ALPA pilot group after the signing of a new collective bargaining agreement to assist with grievances and other implementation issues that tend to occur in the first year of a new contract when management sometimes conveniently “forgets” what it agreed to.
Most important, there’s no application procedure for the funds, no eligibility decision required, and no budget needed for usage of the funds. They’re automatically allocated to the master executive council (MEC) based on a specific formula and provided to the MEC on a monthly basis for one year postcontract.
“I’m extremely excited that ALPA is introducing this new use of MCF funds,” said Capt. Joseph Genovese, the Association’s vice president–finance/treasurer, “and I think it will prove to be immensely valuable to our MECs in the coming months and years.”
A Brief History
The MCF was established in 1985 at a special session of the Board of Directors, following the United Airlines strike of 1985 and the Continental Airlines strike from 1983 to 1985. ALPA’s funds were depleted due the costs associated with the strikes, and action needed to be taken.
The board passed a resolution to increase member dues by 1 percent and use the extra funds to establish the Major Contingency Fund (MCF). The resolution directed that “The MCF may be properly used to provide funding to MECs (a) in advanced stages of negotiations to fund communications-related activities, including strike preparedness, Pilot-to-Pilot® and Family Awareness projects, and (b) during strikes to fund MEC activities.” The resolution was sent to ALPA’s entire membership and was overwhelmingly approved.
Over the next decade, $158 million of dues contributions went to the MCF. Much of the money was spent at the time to support additional pilot strikes.
Today, the MCF is most often used to provide grants to assist ALPA’s MECs as pilot groups enter the end stages of contract negotiations.
Pilot groups don’t necessarily use the full amount of an MCF grant, and those amounts they do use are guided by the MEC’s strategic plan, which is approved by the Executive Council. But simply having the money available can provide a boost to the pilot group, even if it’s never used.
Over the years, the Executive Board has expanded the potential uses for the MCF, including litigation and settlements, organizing, capitalization of other funds (including Kitty Hawk), and other expenditures (including interest on debt and unforeseen advocacy campaigns).
Due to usage of the fund, plus reductions resulting from the economic recession of the 2000s, the MCF balance fell to a low of $42.9 million in 2015. That year, the MCF Review Committee recommended a $100 million target level for the fund, which was recently achieved during the pandemic.
The Issue at Hand
As the target level for the MCF approached, the SSAFR Committee was tasked with exploring, among other finance-related issues, additional ways in which MCF funds might be used in the future. The committee almost immediately targeted the postcontract time period as potentially needing further assistance.
“One of the rules for the MCF grants given for endgame negotiations is ‘self-help first,’” explained Genovese. “An MEC must exhaust its own funds before dipping into its MCF grant and spending ALPA’s funds.” But when this happens, it tends to leave an MEC struggling with low balances postsigning and unable to fund important grievances and properly implement the contract.
“An MEC would spend all its money—by design—to get a contract and then enter in this just-as-important implementation phase without any supporting funds,” Genovese added. “We needed to address that.”
What came out of the committee, and was eventually approved through the Executive Council and Executive Board, was a brand-new use of MCF funds: the Contract Implementation program. The program provides a grant to each MEC upon ratification of a new agreement and is designed to help with the costs of implementing a contract during a time when many MECs are struggling with funds.
The grant doesn’t have to be applied for, doesn’t have to be paid back, doesn’t need to go through any approval process, and doesn’t require a proposed strategic plan or Strike Oversight Board. It’s simply provided, on a monthly basis, to the MEC by ALPA’s Finance Department based on a specific formula.
There are a few extra calculations involved, but the basic grant is equal to full-time flight-pay loss for three first-year captains based on contractual rates for on-property aircraft.
Once a new agreement has been finalized, ALPA’s vice president–finance/treasurer reaches out to the MEC while the Finance Department determines the proper calculations and then will allocate the funds on a monthly basis for 12 months. No questions asked. Even if the funds are unused at the end of those 12 months, they still belong to the MEC.
This program was initially ready for implementation prior to the pandemic, set to be considered at the spring 2020 Executive Board meeting. However, the uncertainty of the economic situation put consideration of the program on hold. The Executive Board eventually approved the program at its fall 2021 meeting.
As of mid-August, two pilot groups had received and begun using their first allocation of funds—Kelowna Flightcraft and Sun Country—while a third, CommutAir, was just being introduced to the program.
“This grant has made all the difference for us,” said Capt. Eric Meenk, the Sun Country MEC chair. “We’ve been able to fully fund our contract compliance and education efforts and our grievances while still being able to prioritize training our new volunteers.”
In the past, the MEC would have to make some hard decisions postcontract signing. “There were things we couldn’t do because we had a new contract to implement,” he explained. “We didn’t have the money for what we wanted to do.”
Capt. Fraser Carpenter, Kelowna Flightcraft’s secretary-treasurer, called the MCF funds “a welcome bonus to fund our MEC effectively. It allows us more flexibility in operating in that we can fund grievances and solve issues while still running the MEC operations.”
F/O Kevin Broman, the Sun Country secretary-treasurer, agreed. “I can operate our MEC like any other year and budget like I normally would,” he said, “knowing that we have these funds. I can’t express what an advantage this is.”
As an example, Broman said that the MEC has produced a podcast series, each edition focusing on a brief section of the contract and putting it into simple terms for the pilot group. The time and tools needed for such an endeavor are covered by this grant.
So, too, is the time spent by Sun Country’s Grievance Committee on the 700 or so grievances the committee has already filed to implement the contract properly. “And we didn’t have to make a decision on funding these grievances or funding other priorities,” said Meenk. “The company is betting that we can’t keep up with the cost and the workload of all these grievances; thanks to this funding, we’re now winning that bet.”
Carpenter remarked that the fund will help in future negotiations as well. “Knowing that this is in place and we have assistance coming will allow us to budget and plan better during the negotiations process,” he explained.
“In five or so years,” Broman predicted, “MEC leaders are going to be looking at each other and wondering how we ever survived without this grant. It’s a game-changer for sure.”
The Power of the Full Association
The MCF’s grants to MECs in the end stages of contract negotiations have proven to be extremely valuable throughout the years. They’ve provided visible, tangible proof to management that the power of the full Association stands behind each and every pilot, and that each MEC will have the funds to fight for the contract their pilots deserve.
This new program ensures that the gains made from those contracts are fully realized and not lost due to disagreements with management on language or intent during the implementation process or the inability to fund an important grievance.
“With so many ALPA pilot groups either in some stage of formal negotiations or approaching it shortly, this Contract Implementation program is sure to be a vital one in the near future,” concluded Genovese. “By helping strengthen and improve the contract through a stalwart implementation process, we touch on the lives of just about every single ALPA member Association-wide.”