07-19-06

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2. Article 13B -- Domestic This will also affect International staffing & upgrades ***“B” is line construction (how your line will look like), while “13A” is TRIP building*** • We will focus on how the major rules affect how your line is built. • The type of lines that can be built. • The credit allowed on your line -- Hard Cap (Line Construction Cap) • Comparisons to ABX and FDX. • The affect to hiring….staffing and upgrades (quality of life issues). • Something to keep tucked away through all of this: • How many times have we heard: “The lines looked great, but it was actually a killer.” • With that said, rules that govern how a TRIP is built (13A) are also available to be viewed at http://IPAonTop.org • 13A relates to daily activities: Duty, Rest, Legs, Block, Circadian, etc.

3. Domestic Line Building There are only 4 combinations of domestic lines that can be built. • Anything goes flying: You can work up to every week; mixed with day & night; mixed with day Turns and/or night Turns. These are your “Base Trip Lines” • Night flying with 4 trips or less per bid period. These are your “EDW lines.” • Day ONLY flying up to every week per bid period. These are your “Non-EDW lines.” • Pure Turn lines -- Pure day or pure Night.

4. Domestic Line Building The following is in reference to: • Anything goes flying: You can work up to every week; mixed with day & night; mixed with day Turns and/or night Turns. These are your “Base Trip Lines” • 50% of the lines can work up to 3-weeks per pay period (‘Long Block’ of days off) • 50% of the lines can work up to 4-weeks per pay period (‘Short Block’ of days off) Notice that it can be broken down into “short” and “long” blocks of days off. The next slide will expand upon this and provide actual TA references. The slide after that will show bid line example. It will look like a line from your bid package. 20% of all your lines may be built in this manner

5. Start Here 100-lines TOTAL with layovers 13.B.b.2.d.5. (p.20 [PDF p.171]) “BASE Trip Lines” MAX of 20% of the TOTAL flying lines may be “Base Trip Lines” Base Trip Lines are a mix of everything: day & night flying trips &/or turns & can fly every week per PPD. Thus, 20-lines fall under this rule. 50% min of those lines can be built 3-weeks per PPD 50% max can be built up to 4-weeks per PPD 13.B.b.2.d.2. (p.20 [PDF p.171]) 13.B.b.2.d.2. • 10-lines(50% [min] of 20) • Must meet Long-Block limits • Option #1 • 1-block of 6-days off • AND • 1-block of 4-off • OR • Option #2 • 1-block of 9-off • UPS can build 3-weeks of flying per PPD (Similar to today’s flying). • 10-lines (50% [max] of 20) • Must meet Short-Block limits • 2-blocks of 3-days off • AND • 1-block of 4-off • UPS can build up to 4-weeks of flying per PPD (similar to MIA’s flying). RELAX… a bid line example will follow after this slide. • Day & night flyingtrips are allowed to be mixed if they are scheduled w/30-hrs off in between…… or as long as rest/time in between trips is at least 18-hrs, but only if the last DP of the preceding trip is less than 6-hrs of duty. 13.B.b.2.d.3.

6. Examples of what can be built (previous slide examples). • This is what can be built under the new rules: 20% of the TOTAL flying lines can look like this. • The trips on these lines can be both day and night flying; they can be mixed with Turns and can fly up to 8 weeks straight. • Substitute any layover city because the network is changing & the new rules allow UPS to omit city purity. **NOTE** Sunday commercials are NOT mandatory and with a change in the network, you may see flying on days that you normally don’t see now &/or even time periods not seen now. In other words, a two day weekend may be something of the past in upcoming years & a third sort in a 24-hr period is possible.

7. Let me emphasize this note… **NOTE** Sunday commercials are NOT mandatory and with a change in the network, you may see flying on days that you normally don’t see now &/or even time periods not seen now. In other words, a two day weekend may be something of the past in upcoming years & a third sort in a 24-hr period is possible. • With the implementation of the Postal contract, MENLO, and other new flying, we may see an increase of OPERATING flights on the weekend. In the future under this updated network, this could create a large reduction of non-operating duty periods to get you into position (CML DHs). • Therefore, it is not too far fetched to see that we could see trips built that start late in the week and only rest on one of the two days during the weekend or even DH…. and then operate to midweek. Example: Saturday – Operate UPS AC out of (from) base Sunday – Layover or maybe even DH to pick up the trip elsewhere. Monday – Operate UPS AC Tuesday – Operate UPS AC Wednesday – Operate UPS AC back to base. (This could have also ended on Tue instead of Wed, etc.) • This can eliminate a lot of commercial DHs and much of this flying can be built without city purity. New type of “stuffers” can be produced and used. • Could all this new flying finally create a 3rd sort in a 24-hr period? Instead of the AM and PM sort seen today, a third sort may present itself to dramatically change things further. • NOT thinking outside the box hurt us during the last contract with the introduction of the Teamster Team Driver. It eliminating the last sort of the week from us (reduction in flying) & created havoc for our schedules. This new flying could do the same thing. • Do our rules take this into account? Something to think about.

8. What about the remainder of those domestic night flying lines? • We started out with 100-lines of which 20 were built as Base Trip Lines (anything goes lines) • That leaves us with 80-lines that contain either night flying or day flying. • Let’s say that 70 of those lines contain ONLY night flying. • The next two slides represent what could be “Week-On/Week-Off” flying.

9. Domestic Line Building This is from slide #3…. IGNORE the embossed There are only 4 combinations of domestic lines that can be built. • Anything goes flying: You can work up to every week; mixed with day & night; mixed with day and/or night Turns. These are your “Base Trip Lines” • Night flying with 4 trips or less per bid period. These are your “EDW lines.” a. A minimum shall have at least 5-days off in between (week-on/week-off) b. Therefore the remaining 25% (the max) may use hours instead of days to separate them • Day ONLY flying up to every week per bid period. These are your “Non-EDW lines.” • Pure Turn lines -- Pure day or pure Night. Let’s focus on bullet #2 The next slide provides actual TA language. The slide thereafter breaks it down for you further

10. TA language • Again, when you see EDW, think NDA trips/lines. Article 13.B.2.c. pages 19 & 20 (PDF pages 170 & 171) • The text in the red box is what creates week-on week-off flying for 75% of these type of lines. Well actually… “4-trips or less” per BID period. There is a difference.

11. 13.B.b.2.c. • 17.5-lines(inferred 25% [max] of 70) • Minimal or No restrictions for days-off in between trips. Can use hours instead of days between trips. • Max of 4-trips per Bid Period (NOT true Week-on Week-off flying since hours and not days could be used to separate trips) Again 70 lines are pure night flying. Thus, the following rules apply to those 70-lines. The remainder… 25%.. can be 2-weeks in-a-row followed by 2-weeks off; then repeat itself. 75% of those lines will be week-on/week-off 13.B.2.c. page 19 (PDF p171) • 52.5-lines(75% [min] of 70) • Must have at least 5-days off in between trips. • Max of 4-trips per Bid Period So… out of 90-lines that have night flying in them, a min of 52.5 will be as close to true Week-On/Week-Off flying as we’ll get. That’s really only around of 58.3%..... Not the TA language of… 100%. Not 85% as the 7/3/06 Flight Times article or ‘road shows’ have advertised… “will be week-on/off.” Based on 100 totallayover lines (no turns, etc), it drops to 46.4%... True week-on/week-off Although if you count the other lines noted above & to the right (17.5-lines; the inferred 25%), it does raise it to 70% of ALL lines (in this example) will fly 4-trips or less per BP (Excludesreserves and hot standby) ADD Turns back into the bid package (let’s say 20-turns) and the OVERALL number of lines w/4-trips or less in a BP drops back down to 58.3%.

12. How DHL handles a 28-day periodand week-on/week-off flying DHL’s Section 25.C.1.c on page 90 This means that all known flying is basically week-on/week-off type of flying.

13. Here’s a quick cheat sheet on what line building in 13B should produce for 3 of those 4 combination of lines: Simple math and lines • Anything goes flying: You can work up to every week; mixed with day & night; mixed with day Turns and/or night Turns. These are your “Base Trip Lines” • Night ONLY flying with 4 trips or less per bid period These are your EDW Lines. • Day ONLY flying up to every week per bid period. These are your Non-EDW lines. • Pure Turn lines -- Pure day or pure Night (THESE ARE NOT SHOWN). We’ll use a simple 100 layover lines for the math

14. 100LAYOVER lines both day and night. NO turns, Hots, etc. Day ONLY flying 90 lines (Hypothetical) 10NON-edw lines (Hypothetical) Max of 15-trips in a Bid Period 20% max 80% min 18 Base Trip Lines (20% of 90 = 18) * Mix of everything 72 lines with 4 or less trips (80% of 90 = 72) Night ONLY flying 9-lines 60% min 9-lines 40% max 50% long block of days-off (3-wks of flying/PPD) 50% SHORT block of days-off (4-wks of flying/PPD) 6-lines 4-lines 50% long block of days-off (3-wks of flying/PPD) 50% SHORT block of days-off (4-wks of flying/PPD) 75% min 25% max 54-lines 18-lines Week-on/off 4-trips per BP * • Mix of everything in Base Trip Lines: • This is a mix of just that… everything. • Day with night (possibly with ONLY 18-hrs off in between) • Turns (day &/or night)

15. Another item that affect our lines • Hard Cap (AKA: Construction Cap)

16. Pseudo Hard Caps at FDX • FDX uses a TAFB limit as one of their pseudo Hard Cap rules. • 313-hrs divided by our trip rig equals 83.5-hrs per 4-week pay period domestic or international • UPS’ hard cap is 86-hrs domestic and 89.6-hrs Internationally. 15-day trips can still be built. • Another rule a FDX that is used as a pseudo hard cap requires that the highest credit line cannot exceed 8.5-hrs greater than the lowest credit line. (See FDX Sec 25.D.1.b. – page 167 of their PDF doc) I.e. If 68-hrs was there lowest credit line, then the highest credit line cannot be greater than 76.5-hrs. • We did not acquire either. FDX section 25.D1.b on page 166 of PDF document • Both would have helped promote hiring and upgrades… like at FDX. Quality of life issues…? • Maybe that’s why they have pilots hired in 2001 becoming captains. That pilot will make roughly $250,000 more before one of our pilots hired the same year (upgrade at UPS based on historical data. It takes 10-yrs to upgrade).That is another quality of life issue.

17. The New Lines and Hiring • Just because we added new lines to a bid package, it doesn’t mean we have to hire. • As our negotiating committee chairman said on the back page of the 07-03-06 IPA Flight times: “Well, there is no doubt that the Company has received gains that cost us bodies in certain areas. Among these are extended deadheads into theater, moving summer vacations out to the shoulders of the summer months to reduce their needs for crews in the Summer Peak, increased reserve flexibility. Especially in bases like MIA where B reserves are currently almost useless to them, and the use of first officers as IROs on the MD-11.” There are more. • These reductions will reduce the number of pilots needed. Instead of furloughing these pilots, UPS will use them to fill the “extra” lines created. Therefore it will also reduce the number of pilots that UPS has to hire. • As an aside, did you know that FDX pilots build their lines and NOT management? Management build the trips. • Click ahead to see how these extra pilots (“gains that cost us bodies”) are used to offset IPA gains.

18. Example 100-lines total • With the new rules, let’s say we increase the number of “Hard Lines” by 10-lines. That would be a 10% increase to the overall number of Hard Lines; 10 more crews… right? • Click ahead/advance the slide 60 Hard Lines 40 Reserve Lines 10 NEW Lines 60 Hard Lines 40 Reserve Lines • That’s 110-lines, BUT with the new rules, including but not limited to reserve, UPS can now reduce the number of reserve lines. Reserves will be MORE productive (fly more) and dependable in the future and UPS will be able to reduce that number if they want to. That’s why UPS wanted and/or agreed to the reserve language we see in our TA today. • This means that UPS can increase the number of Hard Lines and reduce (the “x” above) the number of reserve Lines to end up with the same 100-lines we started with. Thus, NO Hiring.… or at least reduced/slow hiring. 10 NEW Lines 60 Hard Lines 30 Rsrv Lines 100-lines total

19. In the new lines being built for this TA • Please keep in mind that UPS has continued to grow since 9/11. UPS has stated upwards of 12% in their magazine. • They also haven’t hired very many pilots these last several years. In fact, they’ve only hired enough to really cover attrition, maybe added about 50-pilots (28 based on the info below). • 2,727 IPA members on property as of the 2-1-06 seniority list published by UPS. • 248 of them are 59-yrs of age or older. • UPS has hired 276 during the last 4.5-years (based on 2-1-06 sr list). • 276 – 248 = 28 • This means that they are optimizing your schedules (more work per pilot). Therefore any change to TODAY’s schedules will present a positive change…. Make the changes look better than they really are. • I would scrutinize the bid packages with the thoughts of: • Is this the worst case scenario? • Will the new flying (Postal contract, MENLO, etc.) dramatically change our network and how we fly today as compared to this rebuilt TA bid package? • How much flying will be moved/migrate from SDF (Z, MD11, 747) and ONT to an ANC base? • Where are the loopholes that mitigate what we are being presented as a sample bid package? • Are we only getting back to what UPS scheduled several years ago? • UPS is not as ignorant as many of you think, they’ve been negotiating for almost 100-years. • They haven’t hired much so they could optimize our schedules and then have us compare those schedules to something that really on gets us back to how UPS scheduled in 2000… maybe 2003. • It is kind of like a prisoner asking for pillow over a period of 4-years. Finally a brick is given to him. He thanks them for the lovely “pillow” … and means it. 19

20. Less Days on Duty? • The IPA is proud to announce we have to work one less day on average in a 56-day Bid Period. • Current bid packages have data readily available for us to see if this does anything, just look at pages 3 or 4. For ease of reading UPS uses “per pay period” in their data, BUT by contract and past practice it is solely based upon “per BID PERIOD”: Meaning that you can exceed the prorated 13.5-days per 28-day PPD. This practice has not changed under the new TA rules. • Either way, you’ll notice that we already meet this new language. The MD11 is the exception under their optimized schedules, lack of staffing and growth. It has 27.2 avg days in a Bid Period. • In other words, don’t expect more days off. Furthermore, you should be aware that the language being announced as a gain is really only a gain on paper. It doesn’t do anything for you in the real world. These are the “gains” we have to look for and scrutinize. • What did we trade/give-away for this? Art 13.B.1.c(1) on page 16 (PDF p.167) [period]. • The bid packages break this down per pay period; thus, for comparison think a max of 13.5 duty days in a pay period. Click ahead to see an excerpt from our actual bid package. 2005 & 2006 Averages are already less than 13.5.

21. For more information on Scheduling… Please visit: http://IPAonTop.org Domestic and International Rules (Duty, Rest, etc… Including FDX examples) How many times have we heard: “The lines looked great, but it was actually a killer.”

22. We the membership are. The End Quis custodiet ipsos custodes? -- Juvenal “Setting high expectations is key to achieving success. Limited expectations yield only limited results.” – Unknown author Knowledge is our strength; unity, our spirit.