Trapav8r

I just had the opportunity to sit down in Hong Kong with a British couple that has lived there for 13 years. They work for a respectable British company and raised their kids in and around Hong Kong. They lived through the transfer of control from Britain to China 10 years ago, and they reflected on some of the details of our LOA which I wanted to share.
They agreed that Guangzhou is an unacceptable place to live. Therefore, thanks to ALPA and the company on agreeing to Hong Kong as the location of the Asia FDA. I think we all need to realize that opening these FDAs are complicated and delicate undertakings. Finding something acceptable to pilots is only a small aspect of this entire endeavor. This couple was quick to remind me that we are dealing with China; a communist country. They also said that Asia is in the middle of an incredible financial recovery from the crash nearly a decade ago, and many countries are seeing 10 year highs versus the U.S. dollar.
They said $2700 was not acceptable for rent in Hong Kong. That amount of money, not including agent fees and utilities, would get you a 700-800 square ft apartment in a decent part of Hong Kong. Add in other fees, you will be losing money in a sub-standard apartment. I understand the company’s view starts with the assumption that pilots are already “losing money” on their current mortgages. They agree $5000 a month is needed for quality housing, so they subtract $1300 that a person typically “loses” on their mortgage to taxes and PMI to get $2700.
This couple also said that you should expect to pay $10,000 to $12,000 a year per child for acceptable education. For quality education, you could pay up to $30,000 per year. These are all on the assumption that you can get in to a school. There are several posts on this topic, but education is a major issue and not addressed in any way on the LOA.
I also lived in Europe for 4 years. I never lived in France, but I am familiar with the cost of living there and many of these other concepts apply to both FDA’s. Still, I don't think it is smart for ALPA or the company to treat both FDA's as one.
In my opinion, ALPA should reject the company's offer to modify the LOA as it is presented. A new LOA should be drafted that includes significant changes. Bottom line, this is what needs to happen for an LOA to be acceptable. Remember, this should not be a money making venture for any employee above that standard at which they are currently living, but we have to have a clear standard set for acceptable living for those of our brothers and sisters that will be displaced to a Foreign Duty Assignment:

1. We need to have an LOA that is renewable each year until the next contract is signed. This LOA in Asia is at least a year away from implementation. Furthermore, there is likely more than a 4-year period between the time this LOA is signed and implemented, and the time we have a new contract. This is based on the amendable date in 2010, and a traditional 2 year negotiation extension period. There are too many moving parts and complexities that cannot be foreseen which might bury our brothers and sisters for a few years until a contract can be signed. For instance, rental prices in the LOA are fixed in US dollars. With the dollar continuing to fall, rentals could increase significantly without some sort of adjustment to cost of living. The dollar has dropped 10% vs. the Chinese Yuan in the last 2 years and gained 1% or so against the Hong Kong Dollar in the same timeframe. Against the Euro, the dollar has fallen almost 20% since the summer of 2005 and almost 40% since the Euro was introduced almost 5 years ago.
Additionally, you will be expected to drive in a bus 3 hours from Hong Kong to Guangzhou before your trip begins. Also, it appears transportation will only be offered a couple of times per day. Therefore, you will most likely have to meet the bus in downtown Hong Kong. This will add at least 4 hours to your duty day before your trip begins and after you return. This is a best guess because there is no guidance on the specifics. We need to have some control over the treatment of our pilots after this LOA is implemented. Without a yearly renewal, we won’t be able to help issues like this that emerge after implementation.
2. The STV needs to go away completely. I understand the company needs to have a relief valve in place for unforeseeable increases in freight and needed lift. However, that relief valve needs to fall on the company’s dime, not our pilots’ quality of life. The 3-bid period STV was completely unacceptable. The fact that the company has made this mid-course correction to a 1-bid period reveals their understanding of the lunacy of non-vol displacement of any employee. I will not accept an LOA that does not pay someone for their time away from base, even if it does not affect me personally. If they need a safety valve, then they need to staff the FDA with more people and have them sit reserve.
3. They need to increase the monthly allowance to $5000. This allows pilots bidding the LOA to find affordable, acceptable housing. This needs to be for a rental or home purchase, and should be available for school tuition. This would allow a family to choose whether they live in a 1500 square foot apartment in Hong Kong or Paris with no kids in school, or live in an 800 foot square foot apartment and send one child to an acceptable school. Either way, that is the only acceptable amount that will prevent pilots based overseas from losing money by being displaced. The tax equalization proposal was absolutely necessary and Kudos to the negotiating personnel from ALPA and FedEx for agreeing to that. This is not a money making venture, and should not be expected to be so. I am so thankful to be working for FedEx. It is such a blessing. However, employees should not lose money by helping a company seek double digit profit margins.
4. Finally, it would be smart to have these FDA’s treated separately. There are too many differences to economics, culture, and Wide Body vs Narrow Body to treat them as the same.

Some guy

What you suggest would be a great start...let me add a few suggestions:

1) In order to make it fair for everyone (including the company), I would recommend setting up the housing/subsistence allowance similar to the military BAQ/BAS system since the needs of a family of four are greater than that of a single guy. Have separate categories and different amounts for single, married, and married with dependents. These amounts should be adjusted yearly as costs rise or fall. Additionally, I'd have a separate monthly COLA to make up for the difference in the buying power of the dollar versus the local currency and adjusted every year as well.

2) Increase the seed money based on dependent status to cover the costs of making deposits for housing, schools, etc.

3) Include the current move package in section 6, so people can move more than their clothes.

4) Ensure adequate health care is available.

5) Tax equalization, of course.

The LOA should be fair and equitable for everyone, not just a select group. If all of the above was included in the next LOA, I'd vote "yes" and probably bid it in the future. But until then, my vote is NO and I'm not bidding it.


SG

PastV1

With the Expat deduction coming back to the pilots. The company is saving enough money on the DH and productivity stuff.



Past....

Strut

Trap, Your two best arguments are for: Separate LOAs (CDG/HKG) and make the LOA renewable every year. I agree that the housing allowance is inadequate for either domicile, but really don't see an education allowance forthcoming. I disagree with your analysis of the STV, given recent events (Its not just an FCIF - Its a side letter (addendum) to the LOA).

DLax85

Agree with most written above, but the company shouldn't provide more housing money to someone just because they are married, have kids, or a large # of kids --- that was the military mentality that does not apply to the private sector.

Single people shouldn't be "penalized" because they don't have a spouse or children.

Make the housing equitable for the "avg family" of 2 adutls + 2.4 kids, and any "windfall" or "extra cost" the folks with "non-avg" families (i.e. single, empty nesters, folks with 7 kids) is their's to keep or budget for.

OBTW, schooling should be provided but not without limitation....I suggest the company cover 50-75% with a total $ cap per family --- i.e. $15-20K per year.

While I am definitely not a believe of "we'll just fix the LOA in 2010", I think the education benefit is something we can hope to grow in the future --- but that's only based on getting something (at least 50%) of it covered in the LOA we pass now.

fdxflyer

What does the side letter say? And what part of his analysis of stv do you disagree with other than the 3 month length?

MEMFO4Ever

Strut, one more minute of non-vol anything from this company is unacceptable. It's a 'no' vote just based on that. We never had this non-vol crap before and they opened a foreign base. So what's changed?

BrownGirls YUM

Good stuff, Trap. Don't forget that stuff needs to be added to our CBA, not in lieu of it.

HerkyBird

The HKG hotel staff says to allow 5-6 hours, at least, for the drive to Guangzhou. I don't know where our "fact-finders" came up with 3 hours, but I suspect by eye-balling a map, not by actually driving it during the time of day that we'd be going. Hotel staff says night is the worst time, because trucks are clogging the road. Do you want to go through that before going to fly? You'd be fatigued at show time! Plus, expats in a "similar class and craft" (i.e., Cathay pilots) are getting much more of a housing allowance, and you can bet that a labor arbitrator would take serious notice of that. Cathay (CX) gets US $5K to buy a place, $6.6K for an FO's rent, $8.2K for a Capt.'s rent, and $3K for rent if you live anywhere else. Why should we get less? And if you say "add that to their paycheck and you make the same", then by that reasoning, the suit trash executives should be footing the ENTIRE bill for their own rent, and I guarantee you, they do not. Why should we be the red-headed bastard stepchildren on this?

Strut

Limit STV to one month duration and you'll never have to worry about an inverse assignment. For those few of us on these boards who fear the inverse, take heart, there are thousands senior to you that'll jump on it.