election

Representation ElectionMay 15, 2014 - June 12, 2014

Voting Methods

Internet

Voting Methods

Internet

Telephone

Voting Methods

Internet

Telephone

Instructions delivered from NMB via US Mail

Voting Methods

Internet

Telephone

Vote is FINAL once cast

Ballot Choices

Ballot Choices

International Brotherhood of Teamsters

Ballot Choices


Frontier Airline Pilots Association

Ballot Choices



Write-In

Ballot Choices



Write-In

No Representation

Voter Eligibility

Voter Eligibility

673 Pilots Employed as of 12/15/2013

Voter Eligibility


Probationary Pilots - eligible

Voter Eligibility



Management Pilots - ineligible

Voter Eligibility




Retired - ineligible

Voter Eligibility





Separated for any reason - ineligible

Voter Eligibility





Separated for any reason - ineligible

Leaves of Absence - eligible* Unless working for another carrier

Determination of Winner


Majority of votes cast



Only valid ballots will be counted




Voter’s intent for representation must be clear




Voter’s intent for representation must be clear

Blank ballots and “Non Votes” - VOID

Run-Off Election?

Run-Off Election?

Only if no option receives a majority of vote

Run-Off Election?


2 options receiving largest # of votes

Run-Off Election?



No “write-in” option

Run-Off Election?



No “write-in” option

Option receiving highest # of votes wins

Reality

Reality

FAPA & IBT are on ballot

Reality

FAPA & IBT are on ballot

ALPA “write-in” ?

FAPA - Track Record

FAPA - Track Record

Track record providing effective representation

FAPA - Track Record


Based solely on best interests of Frontier Pilots

FAPA - Track Record


Survived bankruptcy with CBA largely intact


FAPA - Track Record


Survived bankruptcy with CBA largely intact• No work rule changes


FAPA - Track Record



• Furlough mitigation via VLOA

• No work rule changes


FAPA - Track Record





• Unsecured creditors claim


FAPA - Track Record





• Unsecured creditors claim

• Seat at table (UCC)


FAPA - RAH Acquisition


Overriding goal of keeping Frontier separate


Overriding goal of keeping Frontier separate• Keep seniority list separate



• Keep CBA separate

• Keep seniority list separate





IMSL was a disaster, BUT….





IMSL was a disaster, BUT….• FAPA fought for Airbus fence





IMSL was a disaster, BUT….

• FAPA limited impact on day-to-day lives

• FAPA fought for Airbus fence

FAPA - 2011 Restructuring


Frontier Airlines at risk of liquidation


Frontier Airlines at risk of liquidationTentative Agreement



• LOA 67 allowed Frontier to survive

Tentative Agreement



• Commercial Agreement provided “skin in the game”


Tentative Agreement





• Contractual commitment by RAH to sell Frontier

Tentative Agreement





• FAPA limited impact on day-to-day lives

• Contractual commitment by RAH to sell Frontier

Tentative Agreement

FAPA - LOA 67

FAPA - LOA 67

Deferred previously negotiated snap-backs

FAPA - LOA 67

Deferred previously negotiated snap-backsTemporarily reduced 401k match

FAPA - LOA 67

Deferred previously negotiated snap-backsTemporarily reduced 401k matchTemporarily froze longevity

FAPA - LOA 67


Temporarily reduced vacation/sick accrual

FAPA - LOA 67



Extended amenable date of CBA to 2017

FAPA - LOA 67



Extended amenable date of CBA to 2017

Total Value: ~$53 Million

FAPA - Commercial Agreement

FAPA - Commercial AgreementStructured LOA 67 as investment


• Equity


• Equity

• Profit Sharing


• Equity

• Profit Sharing

• Deadline to sell Frontier (12/31/2014)


• Equity

• Profit Sharing


Formed FAPA Invest for Frontier Pilots


• Equity

• Profit Sharing


Formed FAPA Invest for Frontier Pilots• Protect Investment Interests


• Equity

• Profit Sharing


Formed FAPA Invest for Frontier Pilots• Protect Investment Interests

• Return to those who invested

FAPA - “Investment” Return


$1.7 Million in Cash

Paid in December 2013



$3.5 Million Profit Sharing Buyout


4 annual payments starting April 2013



$3.5 Million Profit Sharing Buyout

4% Equity Ownership of Frontier Airlines


4 annual payments starting April 2013

FAPA - Equity Value?


4% of Initial Public Offering



- or -



4% cash payment based on valuation

- or -




- or -

• if no “Change of Control” by 2020




- or -

• if no “Change of Control” by 2020• based on Frontier Airlines valuation

as determined by 2 independent auditors

FAPA - 4% of What?

FAPA - 4% of What?

Conservative estimate of IPO?

FAPA - 4% of What?


$1 Billion

FAPA - 4% of What?


$1 Billion$40 Million to Frontier Pilots

FAPA - 4% of What?


Spirit Airlines Market Cap at IPO?

$1 Billion$40 Million to Frontier Pilots

FAPA - 4% of What?



$1 Billion

~ $825 Million

$40 Million to Frontier Pilots

FAPA - 4% of What?



$1 Billion

~ $825 Million• 35 Airplanes


FAPA - 4% of What?



$1 Billion


• Q1 Revenue ~$233M


FAPA - 4% of What?



$1 Billion


• Q1 Revenue ~$233M


• Frontier Revenue: $327M

Final Qtr. Reported

under RJET

Comparison

FAPA - Equity Appreciation?

No guarantees


No guarantees, BUT…..


No guarantees, BUT…..• Indigo pioneered ULCC model at Spirit



• Spirit was an unproven model to Investors

• Indigo pioneered ULCC model at Spirit





• Spirit was smaller than Frontier






• Indigo seeks to replicate success at Frontier






• Indigo seeks to replicate success at Frontier

So how has Spirit performed as an investment?

Spirit Appreciation

Spirit Appreciation

Over 450%in 3 years!

Spirit Pilot Equity?

Spirit Pilot Equity?0% - They gave it up

Spirit Pilot Equity?0% - They gave it upWhat if they hadn’t?

Spirit Pilot Equity?0% - They gave it upWhat if they hadn’t?

For illustrative purposes only!

DISCLAIMER: FAPA does not represent that your investment in Frontier Airlines will perform or achieve the same results as this hypothetical 4% equity position in Spirit

illustrates. This information should not be regarded as investment advice or as a forecast of future investment performance.

Why support FAPA?

Why support FAPA?

Proven Effective as Independent Union

Why support FAPA?

Proven Effective as Independent Union• Focused 100% on Frontier Pilots Interests

Why support FAPA?

Proven Effective as Independent Union• Focused 100% on Frontier Pilots Interests

• Maintain autonomy

Why support FAPA?


• Insulated from short-term risks of ALPA

• Focused 100% on Frontier Pilots Interests


Why support FAPA?





• Leverage to negotiate future merger with ALPA

Why support FAPA?





• Leverage to negotiate future merger with ALPA

• X-factor

Pilot Concerns with FAPA?


Contentious History


Contentious History• FAPA 2.0 - New philosophy & attitude



FAPA has always given in to pressure



• Gun to head? Bankruptcy 1113/RAH Restructuring





Small fish in big pond





• Same situation if ALPA








Indigo will dominate FAPA







Indigo will dominate FAPA


• Why? CBA intact until 2017

Dues

Dues

FAPA ALPA

Dues

Dues

FAPA ALPA

1.65%

Dues

Dues

FAPA ALPA

1.65% 1.9%

Dues

Dues

FAPA ALPA

1.65% 1.9%

$1,237,500 $1,425,000

ALPA Considerations

ALPA Considerations

50,000 strong?

ALPA Considerations

50,000 strong?• Competing interests

ALPA Considerations


• Conflicts of interest

ALPA Considerations


• Conflicts of interest• ALPA National must balance

those interests

ALPA Considerations



those interests• Likelihood of DFR’s

ALPA Considerations



those interests• Likelihood of DFR’s • Please talk to former ALPA pilots

ALPA Considerations

50,000 strong?• Competing interests• Multiple DFR lawsuits

ALPA Considerations


• TWA vs. ALPA

ALPA Considerations


• TWA vs. ALPASettled on 1/23/2014

ALPA Considerations


• TWA vs. ALPASettled on 1/23/2014$53 Million in damages

ALPA Considerations


• TWA vs. ALPASettled on 1/23/2014$53 Million in damages

$27 Million in ALPA funds$26 Million - Reinsurers

ALPA Considerations


• TWA vs. ALPA• CAL Pilots vs. ALPA

ALPA Considerations



CAL argues conflict of interest

ALPA Considerations



CAL argues conflict of interestALPA favored UAL pilots

ALPA Considerations



CAL argues conflict of interestALPA favored UAL pilotsALPA concerns of losing UAL

ALPA Considerations


• TWA vs. ALPA• CAL Pilots vs. ALPA• Airtran Pilots vs. ALPA

ALPA Considerations



Related to SWA merger

ALPA Considerations



Related to SWA merger9 DFR Counts

ALPA Considerations



Related to SWA merger9 DFR CountsSeeking $200K/Pilot/Count

ALPA Considerations


• TWA vs. ALPA• CAL Pilots vs. ALPA• Airtran Pilots vs. ALPA• Eagle vs. ALPA

ALPA Considerations



Filed 3/31/2014

ALPA Considerations



Filed 3/31/2014Claim ALPA favored APA

ALPA Considerations



There are others!

ALPA Considerations

50,000 strong?• Competing interests• Multiple DFR lawsuits• DAL & UAL pilots leaving?

ALPA Considerations


• Delta - 11723 Pilots

ALPA Considerations


• Delta - 11723 Pilots• 5800+ have signed NMB cards

ALPA Considerations


• Delta - 11723 Pilots• 5800+ have signed NMB cards• 6500 is goal to file dispute

ALPA Considerations


• Delta - 11723 Pilots• 5800+ have signed NMB cards• 6500 is goal to file dispute• Estimated ALPA Dues: $38M

ALPA Considerations


• United - 12505 Pilots• Estimated ALPA Dues: $40M

ALPA Considerations


• Majority of rest are regionals

ALPA Considerations

50,000 strong?

Airtran ASA CommutAir ExpressJet Jazz Piedmont

Air Transat Bearskin Compass FedEx JetBlue PSA

ATI Calm Air Endeavor Air First Air Kelowna Spirit

Air Wisconsin

Canadian North

Envoy AirHawaiia

nMesa Sun Country

Alaska CanJet Evergreen Island AirNorth

AmericanTrans States

ALPA Considerations


ALPA Merger Policy?

• Multiple DFR lawsuits• DAL & UAL pilots leaving?


ALPA Considerations

50,000 strong?

• A Framework for discussion

• Competing interests

ALPA Merger Policy



ALPA Considerations

50,000 strong?


• Competing interests

ALPA Merger Policy



• Not controlling (Allegheny-Mohawk)

ALPA Considerations




ALPA Merger Policy

• Not controlling (Allegheny-Mohawk)

No Guarantees

• 2 ALPA MEC’s Negotiate• Mediate• Arbitrate

• Allegheny-Mohawk• Delta-Northwest ended up

in arbitration• Midwest?

ALPA Insurance Benefits

Loss of License Insurance


Loss of License Insurance• Inferior to Frontier Pilot LTD plan(s)



Replaces less income




Limited Duration




Limited Duration

Longer Elimination Period




Short Term Disability

Limited Duration





Short Term Disability• Inferior to Frontier STD plan

Limited Duration






Limited Duration



Insurance Comparison

Short Term Disability FAPA ALPA

Cost (assume $80k annual income)

Coverage

STD Elimination Period

Duration




$35.08/month

Coverage


Duration




$35.08/month $42.46/month

Coverage


Duration





Coverage


Duration

$37.38/month

for 60 dayelimination





Coverage $1500/week


Duration





Coverage $1500/week $1000/week


Duration







15 days

Duration







15 days 30 or 60 days

Duration

$37.38/month

for 60 dayelimination








Duration 11 weeks








Duration 11 weeks 52 weeks




$35.08/month

$42.46/month




Duration 11 weeks 52 weeks


Long Term Disability FAPA(LTD)

ALPA(Loss of License)


Coverage

Elimination Period

Duration





No Charge

Coverage

Elimination Period

Duration





No Charge

Coverage

Elimination Period

Duration

Company pays 90%

Union Dues pay 10%





No Charge$151.67/month

Coverage

Elimination Period

Duration






Coverage

Elimination Period

Duration

~$250.00Company pays

$225Union Dues

pay $25






Coverage $5000/month

Elimination Period

Duration






Coverage $5000/month $4800/month*

Elimination Period

Duration







Elimination Period

Duration

* $2400 after 2 years







Elimination Period 90 days

Duration







Elimination Period 90 days 365 days

Duration








Duration to age 65








Duration to age 65 4 years*









* Option to extend at additional cost







$4800/month*





ALPA(Loss of License

PLUS)


No Charge



Duration to age 65




PLUS)





Duration to age 65




PLUS)



Coverage $5000/month $4800/month


Duration to age 65




PLUS)





Duration to age 65

Years 1 & 2




PLUS)





Duration to age 65

Years 3+




PLUS)





Duration to age 65




PLUS)





Duration to age 65 to age 65




PLUS)




$2400/month


Duration to age 65 to age 65

ALPA Considerations?

Experience & Strength with Indigo


Experience & Strength with Indigo• Study Spirit’s ALPA Contract


Experience & Strength with Indigo• Study Spirit’s ALPA Contract• Spirit Struck



• Adversarial relationship




Well documented

“Maximum Cost” Grievance Process




• Going to “roll over” FAPA

Well documented






Well documented


Contract not amenable until 2017





Well documented



Snap-backs on track





Well documented



Snap-backs on track

Leverage?


Resources


Resources• Get what you pay for


Resources• Get what you pay for• Big carriers get “A-Team”



• Delta, United & FedEx are the big dogs



• Delta, United & FedEx are the big dogs• Trickles down from there



• Delta, United & FedEx are the big dogs• Trickles down from there

• Please seek feedback from peers who previouslyworked under ALPA representation


Oversight


Oversight• ALPA National represents multiple interests


Oversight• ALPA National represents multiple interests• ALPA National determines level of resources


Oversight• ALPA National represents multiple interests• ALPA National determines level of resources• FAPA C&BLs provide mechanism for oversight



Any active member may bring business before the BOD




Any member may petition membership for change





BOD is bound by majority vote of active members





BOD is bound by majority vote of active members

Officer recall procedures

VOTE FAPA!

Proven Effective

Ready to roll

Better Insurance

Lower Dues

100% of Resources Support Frontier Pilots

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