In the Matter of the

Application of the

ASSOCIATION OF PROFESSIONAL FLIGHT ATTENDANTS

alleging a representation dispute pursuant to Section 2, Ninth, of the Railway Labor Act as amended

involving employees of

AMERICAN AIRLINES, INC.

TWA AIRLINES, LLC.

29 NMB No. 40

CASE NO. R-6869

(File No. CR-6742)

FINDINGS UPON

INVESTIGATION

March 19, 2002

This determination addresses an application filed by the Association of Professional Flight Attendants (APFA or Organization). APFA requests the National Mediation Board (Board) to investigate whether American Airlines, Inc. (American), and TWA Airlines, LLC. (TWA-LLC),1 are operating as a single transportation system.

The weight of the evidence establishes that American and TWA-LLC constitute a single transportation system.

PROCEDURAL BACKGROUND

On December 12, 2001, APFA filed an application alleging a representation dispute involving the Flight Attendants of American. APFA asserted that American and TWA-LLC constitute a single transportation system. APFA currently represents the Flight Attendant craft or class at American. The International Association of Machinists and Aerospace Workers, AFL-CIO (IAM) currently represents the Flight Attendant craft or class at TWA-LLC. The application was assigned NMB File No. CR-6742.

The Board assigned Eileen Hennessey to investigate.

On December 13, 2001, the Board requested that American and TWA-LLC provide information. American and TWA-LLC jointly responded on December 21, 2001. APFA filed a response on January 18, 2002, and supplemented its response on January 22, 2002. The IAM filed a response on January 18, 2002, and supplemented its submission on January 31, 2002.

ISSUES

Are American and TWA-LLC a single transportation system? If so, what are the representation consequences?

CONTENTIONS

APFA

APFA contends as follows:

American and TWA-LLC became a single transportation system on December 2, 2001, when American significantly integrated TWA-LLC's operations into American's. The Carriers' management is substantially integrated. Labor relations and personnel functions for TWA-LLC and American are administered by American. The Carriers are marketed and held out to the public and the government as a single carrier. American's scheduling department schedules the combined route network for the Carriers. The "AA" designator code is used for both TWA-LLC and American in the reservations systems, on printed schedules and tickets and in the Official Airline Guide. American's insignia and logo are used for both carriers and the livery of TWA-LLC aircraft is being changed to full American livery. TWA-LLC employees wear American uniforms or will wear them as the uniforms become available in 2002. American and APFA concluded an Integration Agreement that provides for the applicability of the American/APFA collective bargaining agreement to TWA-LLC flight attendants. The Integration Agreement established a combined seniority list and other terms applicable to the American and TWA-LLC flight attendants when APFA becomes the representative of the TWA-LLC flight attendants. The only reason a separate TWA-LLC grievance process continues to exist is because the Board has not yet determined that the Carriers are a single transportation system and the TWA-LLC flight attendants are not yet covered by the APFA flight attendant certification.

Since the acquisition of TWA, Inc., American has made clear its intention to promptly combine TWA-LLC into American. The transition agreements between IAM and American also leave no doubt that the two carriers would be integrated promptly. To the extent that TWA-LLC and American are separate, "any perceived 'separateness'" does not defeat the single carrier determination under NMB precedent. The Board's single carrier determination is not dependent upon seniority integration. The short delay in full integration of flight operations until Federal Aviation Administration (FAA) certifications are switched over from TWA-LLC to American, does not defeat a single carrier determination. Finally, it is established Board policy to apply any single carrier determination to all crafts or classes on the combined system.

With regard to IAM's request to hold a hearing in this matter, APFA states, there is no basis to hold a hearing because there is no bona fide dispute over facts that are material to the Board's determination.

IAM

The IAM argues that APFA's application should be denied or, in the alternative, that the Board should hold a hearing to determine whether and when the American and TWA-LLC systems will be sufficiently integrated to warrant a single transportation system. IAM contends as follows:

American and TWA-LLC are not sufficiently integrated to be a single transportation system under the Railway Labor Act (RLA). The flight operations and labor relations of TWA-LLC are, and for the foreseeable future, will be, kept separate from the flight operations and labor relations of American. Flight Attendants for TWA-LLC and American will continue to work on separate aircraft, separate routes, from separate domiciles and with separate management.

IAM, TWA-LLC and American are parties to a labor protection agreement which states that American will use its "reasonable best efforts" with APFA "to secure a fair and equitable process for the integration of seniority." TWA-LLC and IAM Transition Agreement, Memorandum of Understanding dated March 9, 2001. American's "best efforts" commitment was given in exchange for the IAM's waiver of the portions of its collective bargaining agreement addressing seniority integration. IAM's collective bargaining agreement with TWA, Inc., required TWA, Inc. to insist that American, as the purchaser of its assets, agree to integrate flight attendant seniority lists under the process established by the Civil Aeronautics Board in Allegheny-Mohawk Merger Case, 59 CAB 19, 45, 49 (1972). American would not agree to that condition because its collective bargaining agreement with APFA would not have allowed it to insist on the use of the Allegheny-Mohawk procedures. American agreed to provide the same seniority benefit protection contained in the APFA collective bargaining agreement. American also agreed to use its "reasonable best efforts" to get APFA to agree to some reasonable integration process. American has ignored this commitment.

Instead of facilitating discussions between APFA and IAM, American met secretly with APFA over the course of several months in 2001 and ultimately crafted a seniority integration agreement with APFA which placed all TWA-LLC flight attendants at the bottom of the seniority list. The terms of the American/ APFA seniority integration agreement will not become effective until December 31, 2002. American is seeking an early determination of single carrier status in order to eliminate TWA- LLC furloughed flight attendants (nearly one-third of the TWA- LLC flight attendant work force) by placing them at the bottom of all seniority lists regardless of occupational seniority. TWA-LLC flight attendants have a pending grievance over unilateral changes to their company seniority and the seniority integration agreement between American and APFA. A premature Board determination will make resolution of the seniority integration grievance more difficult because of the existence of interlocking agreements between American, TWA-LLC, APFA, and IAM. Accordingly, the Board's determination on APFA's single carrier application should be deferred until all disputes concerning the seniority integration of TWA-LLC and American flight attendants are resolved.

American and TWA-LLC

It is American and TWA-LLC's position that a single transportation system existed as of December 2, 2001.

FINDINGS OF LAW

Determination of the issues in this case is governed by the RLA, as amended, 45 U.S.C. §§ 151-188. Accordingly, the Board finds as follows:

I.

American and TWA-LLC are common carriers as defined in 45 U.S.C. § 181.

II.

APFA and IAM are labor organizations as provided by 45 U.S.C. § 152, Ninth.

III.

45 U.S.C. § 152, Fourth, gives employees subject to its provisions, "the right to organize and bargain collectively through representatives of their own choosing. The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class for the purposes of this chapter."

IV.

45 U.S.C. § 152, Ninth, provides that the Board has the duty to investigate representation disputes and to designate who may participate as eligible voters in the event an election is required. In determining the choice of the majority of employees, the Board is "authorized to take a secret ballot of the employees involved, or to utilize any other appropriate method of ascertaining the names of their duly designated and authorized representatives . . . by the employees without interference, influence, or coercion exercised by the carrier."

STATEMENTS OF FACT

Corporate Transactions and Representation

On April 9, 2001, American acquired certain assets of TWA, Inc. Simultaneously, American transferred the assets to a newly created subsidiary known as TWA-LLC. TWA-LLC is a wholly- owned subsidiary of American Airlines and is certified by the FAA and Department of Transportation (DOT) as a Part 121 direct air carrier pursuant to 14 C.F.R. Part 119. TWA-LLC agreed to recognize IAM as the representative of flight attendants members at TWA-LLC after the assets were transferred to TWA-LLC.

APFA represents flight attendants on American pursuant to Board certification in Case No. R-4711 (1977). IAM was certified as the representative of flight attendants at TWA, Inc. in Case No. R-6740 (2000).

American employs 22,860 employees covered by this application. TWA-LLC employs 4,055 flight attendants.

Operations

American and TWA-LLC operate under separate FAA Air Carrier Certificates. TWA-LLC's Flight Dispatch, Flight Safety and Maintenance & Engineering's Quality Assurance and Quality Surveillance functions are controlled by TWA-LLC.

The FAA requires that aircraft registered to a certificate holder be operated in accordance with the certificate holder's specific procedures. 14 C.F.R. §121.133; 14 C.F. R. §121.400.

In December, 2001, American and APFA signed an Agreement on Seniority Integration and Related Matters concerning the integration of the flight attendants at American and TWA-LLC. The Agreement includes a combined seniority list of American and TWA-LLC flight attendants. This agreement will become effective on the date that the Board finds that American and TWA-LLC are a single carrier and resolves any representation issues. The combined seniority list will be effective on the earlier of December 31, 2002, or the date on which a TWA-LLC flight attendant works in an in-flight cabin position at American.

According to the Transition Agreements between TWA-LLC and the IAM, TWA-LLC will receive pay and benefits equivalent to American pay rates and benefits, effective January 1, 2002. As of December 2, 2001, work rules equivalent to American work rules became applicable for TWA-LLC flight attendants. The TWA-LLC flight attendants will be covered by the American/APFA collective bargaining agreement once the Board makes a single carrier determination and resolves the representation issues. TWA-LLC employees become American employees as they complete transitional training, which will begin during 2002. Once training has been completed, the TWA-LLC flight attendants will begin working in an in-flight cabin position on American aircraft.

TWA-LLC and American have separate operating certificates. Therefore, flight attendants at TWA-LLC and American are physically separated and have separate In-flight Services Operations, management structures and training . TWA- LLC flight attendants may not bid for American flights and American flight attendants may not bid for TWA-LLC flights. American flight attendants are not authorized to "jumpseat" on TWA-LLC aircraft and TWA-LLC flight attendants are not authorized to "jumpseat" on American aircraft.

Management and Labor Relations

As of January 1, 2002, the following functions at TWA-LLC are managed and operated by American Airlines: Legal, Advertising, Marketing, Passenger Service, Flight Service, certain sections of Maintenance and Engineering, Labor/Employee Relations, Human Resources, Finance, Revenue Management, Scheduling, Government Affairs, Corporate Communications, and Cargo.

FAA regulations require that Flight Dispatch, Flight Safety

and Maintenance & Engineering's Quality Assurance and Quality Surveillance functions remain under TWA-LLC's control until it surrenders its certificate. TWA-LLC retains a separate Director of Operations, Chief Inspector, Director of Maintenance, Chief Pilot, and Director of Safety. The Transition Agreement requires that the TWA-LLC/IAM grievance procedures will remain separate from American grievance procedures. TWA-LLC maintains a separate labor relations department with a policy dictated by "past practice" of TWA, Inc.

Since approximately October 2001, labor relations on both American and TWA-LLC have been the responsibility of Jeff Brundage, Vice President, Employee Relations, American Airlines. Brundage reports to Sue Oliver, Senior Vice President of Human Resources, American Airlines.

TWA-LLC's Managers are analogous to members of a board of directors. All of TWA-LLC's Managers are also officers of American. William F. Compton, President, TWA-LLC, reports to Robert Baker, who serves as both CEO of TWA-LLC and Vice Chairman of American.

Routes and Schedules

American's Scheduling Department schedules the combined American/TWA-LLC route network. As of December 2, 2001, American's designator code "AA" replaced TWA-LLC's designator code on all reservation systems in the Official Airline Guide and on printed schedules and tickets for former TWA-LLC flights.

Marketing and Advertising

American took over TWA-LLC marketing on April 9, 2001. All "TWA Aviators'" members are now part of American's "AAdvantage Miles" program. American is creating "AAdvantage" accounts for every "TWA Aviators'" member. TWA, Inc. frequent flyer account balances will be rolled over and converted into the American system until November 30, 2002.

On November 3, 2001, TWA-LLC began the process of removing from all airline booking sources TWA-LLC flights departing on or after December 2, 2001. Concurrently, American replaced these flights with American-marketed flights using the "AA" designator code and flight number. All previously booked TWA-LLC reservations and e-tickets were moved from the TWA- LLC flight to the corresponding American-marketed flight. Customers traveling on TWA-LLC flights after December 2, 2001, call American reservations or book only American marketed flights with their travel agent. DOT regulations require that American disclose to ticket purchasers and passengers that the flight is operated by TWA-LLC.

In November 2001, American registered the name "American Airlines" with the FAA and DOT to be used in connection with TWA-LLC's operations. Effective December 2, 2001, American's trade name and logo replaced TWA-LLC's on advertising, printed schedules, ticket stock and jackets, stationary and name tags.

American and TWA-LLC passengers are processed at American ticket counters, and fly from American gates. TWA, Inc.'s website, www.twa.com directs users to the American website. American's in-flight magazine is used on TWA-LLC flights.

Signs, Logos, and Uniforms

American developed a transitional livery for TWA-LLC incorporating both the TWA, Inc. and American Airlines insignia. Prior to December 2, 2001, 48 of the 166 TWA-LLC aircraft were painted in the transitional livery.

All TWA and TWA-LLC corporate insignia and logos were replaced by American corporate insignia and logos as of December 2, 2001. The Carriers state that by May 2002, all TWA-LLC aircraft will be converted to full American livery and carry a small placard to the right of the cabin entry door identifying it as "TWA an American Airlines company operated by TWA Airlines LLC".

The Carriers state that TWA-LLC's flight attendants will begin wearing American uniforms as they become available in 2002.

DISCUSSION

I.

The Board's Authority

45 U.S.C. § 152, Ninth, authorizes the Board to investigate disputes arising among a carrier's employees over representation and to certify the duly authorized representative of such employees. The Board has exclusive jurisdiction over representation questions under the RLA. Switchmen's Union v. National Mediation Board, 320 U.S. 297 (1943); General Committee of Adjustment v. M.K.T. Railroad, 320 U.S. 323 (1943). In Air Line Pilots Association, Int'l v. Texas Int'l Airlines, 656 F.2d 16, 22 (2d Cir. 1981), the court stated, "the NMB is empowered to . . . decide representation disputes arising out of corporate restructurings."

II.

Single Transportation System

In Trans World Airlines/Ozark Airlines, the Board cited the following indicia of a single transportation system:

[W]hether a combined schedule is published; how the carrier advertises its services; whether reservation systems are combined; whether tickets are issued on one carrier's stock; if signs, logos and other publicly visible indicia have been changed to indicate only one carrier's existence; whether personnel with public contact were held out as employees of one carrier; and whether the process of repainting planes and other equipment, to eliminate indications of separate existence, has been progressed.

Other factors investigated by the Board seek to determine if the carriers have combined their operations from a managerial and labor relations perspective. Here the Board investigates whether labor relations and personnel functions are handled by one carrier; whether there are a common management, common corporate officers and interlocking Boards of Directors; whether there is a combined workforce; and whether separate identities are maintained for corporate and other purposes.

14 NMB 218, 236 (1987).

The Board finds a single transportation system only when there is substantial integration of operations, financial control, and labor and personnel functions. American Airlines and Reno Air, 26 NMB 467 (1999); AirTran Airways and AirTran Airlines, 25 NMB 429 (1998). The Board has noted that a substantial degree

of overlapping ownership, senior management, and boards of directors is critical to finding a single transportation system. Precision Valley Aviation, Inc., d/b/a Precision Airlines/Valley Flying Service, Inc., d/b/a Northeast Express Regional Airlines, 20 NMB 619 (1993).

The Board recently found that American and TWA-LLC operate as a single transportation system for the craft or class of Flight Deck Crew Members. American Airlines, Inc./TWA Airlines, LLC., 29 NMB 201 (2002) Based upon the facts established by the investigation and the determination above, the Board finds that American and TWA-LLC operate as a single transportation system for the craft or class of Flight Attendants.

It is well established Board precedent that contractual issues arising from a single transportation system determination are outside of the Board's jurisdiction. The Board finds that to delay its findings in this case pending the resolution of seniority integration would be contrary to the RLA's purpose of promoting labor stability. American Airlines/TWA Airlines, LLC., above. See British Airways/British Caledonian Airways, above; 16 NMB 17 (1988); Delta Air Lines, Inc., and Western Air Lines, Inc., 14 NMB 291 (1987).

CONCLUSION

The Board finds that American and TWA-LLC operate as a single transportation system for representation of the Flight Attendants craft or class. Accordingly, the APFA's application in NMB File No. CR-6742 is converted to NMB Case No. R-6869. Pursuant to the Board's Representation Manual (Manual) Section 19.6, the investigation will proceed to address the representation of the proper craft or class. APFA filed its application with a seniority list of the Flight Attendants represented by APFA dated June 1, 2001. The IAM has 30 days from the date of this determination to file an application supported by a showing of interest of at least 35 percent of the single transportation system or to supplement the showing of interest in accordance with Manual Section 19.601. The participants are reminded that existing certifications remain in effect until the Board issues a new certification or dismissal. Manual Section 19.602.

By direction of the NATIONAL MEDIATION BOARD.

Benetta M. Mansfield

Chief of Staff

Copies to:

Harry A. Rissetto, Esq.

Sheldon M. Kline, Esq.

Richard A. Malahowski

John Ward

Robert Roach

David Neigus, Esq.

William O'Driscoll

Marie Chopra, Esq.

Clay Warner, Esq.

Arthur M. Luby, Esq.