White Paper

Dues Check Off (DCO) Program TAPA 221004

On Jan. 19, 2021, the TAPA Constitution & Bylaws (By-laws) was agreed as a prerequisite, intended for the sale of the airline.

TAPA’s initial dues rate was determined from Res. #7, planning for cash reserves necessary to establish a formal pilots’ union.

Accordingly, an acquisition or merger with the “previous arrangement” would complicate pilot organization, so Res. #8 directed TAPA to establish as a “non-profit 501(c)5.” Pilots voted to amend the By-laws under Resolution #8 & #9 to avert the potential of a third-party hostile “takeover.”

Res. #7 directed the BPR or “Board” to determine the governance necessary, incorporate TAPA and set-up dues collection within 45 days of Res. #7 approval. Res. #7 passed with 100% approval of the voting pilots. Two weeks later, the Board met to discuss the initial dues rate and agreed unanimously to “one-and-one-half percent” (0.015 or 1.5%) of 21 Air, LLC gross pilot pay, excluding pilot per diem and expenses, to start-up TAPA’s business unit and create cash reserves. The Dues Check Off (DCO) program was activated within the CBA, in accordance with the Agency Shop (Sec. 19.B) requirements from the TAPA By-laws.

The organizational philosophy of “TAPA, Inc.” has been to create a productive group of professionals that will enhance 21 Air’s business operations. For an organization within an organization to function effectively, TAPA hired legal and financial expertise. This structured TAPA for our future growth and forthcoming challenges. Furthermore, hiring outside consultants avoids the conflicts made at other independent pilot unions (Ie. UPS).

Our first step was for the BPR to review the CBA and TAPA bylaws to determine a dues rate and the Agency Shop fees. In the spirit of a creating a unique pilots union, the Board set the Agency Shop fees at par with our TAPA dues. However, TAPA dues are set below the national average of ALPA, SWAPA, Allied (AMR) or Teamsters, noted as high as 3.125%. As a lean and agile pilots’ association, TAPA has great potential benefits to offer its membership, when over half of ALPA’s dues finance a national office and an established political agenda.

1. Why should TAPA collect dues?

PRO

* Represent pilots for grievances & assist with acquisition(s) or mergers.

* Hire consultants to refine TAPA’s structure and Company interactions.

* Provide Pilot standards to negotiate quality of life improvements & benefits.

CON

* 21 Air’s pilots will be represented only by volunteers.

* Labor creates liability exposure for Management that triggers a response.

* Managers have a conflict of interest when representing a pilot’s alleged misconduct.

Problems the Board addressed with #1 CON arguments:

The CBA first established dues collection and Agency Shop fees to operate and build cash reserves necessary for CBA representation and planning, to include long-term pilot benefits. The challenge is to keep TAPA’s overhead and operations costs lowand get much of the pilot’s work done, initially with outside consultants, rather than hire full-time TAPA staff. Many 21 Air pilots may not realize that labor lawyers and consultants could charge TAPA upwards of $850 per hour for pilot representation and staff costs within these legal firms are high. TAPA could later hire our own staff.

2. Why does the Board sets and recommend changes to the TAPA dues and Agency Shop fees?

PRO

* Board guides long-term planning, based on several variables.

* Size of the TAPA pilot group & growth of reserves (MCF) can lower dues & fees.

* Annual dues and Agency Shop fee reviews are included in TAPA’s Bylaws.

CON

* Pilots are often cheap and can be transient and may have no interest in growth.

* Cash reserves (MCF) or long-term benefits are not available absent dues & fees.

* Timeliness of assessments will not ramp-up in time for lawyers or consultants.

Problems the Board addressed with CON arguments:

Labor lawyers require retainers and fees to remain on TAPA’s watch. Our dues rate was set two (2) weeks after Res. #7 passed. This TAPA dues rate or our Agency Shop fee is effective until Aug. 2023. We pay our consultants on time, build TAPA reserves, and retain our outside professionals from all that. TAPA elected to prevent special assessments and no TAPA funds were risked on the President’s termination case. The 1.5% dues and Agency Shop fees rate were established before the Company’s “adverse action” against our TAPA President or, 21 Air management’s “coup d'état” against TAPA, Inc. was attempted.

3. Why does the Board present the DCO form to Members?

PRO

* 21 Air’s pilots have the choice to “opt-out”of TAPA Representation.

* TAPA dues are optional, but Agency Shop fees are the same rate but mandatory.

* Save $15 per pay period on auto withdraw v. mailing-in of dues or fees.

CON

* Agency shop (limited representation & benefits) fees are the same rateas TAPA dues.

* Direct Bill charges adds legal fees for collection by TAPA lawyers.

* Creates busy-work for your TAPA volunteers with no hired administration staff.

Problems the Board addressed with CON arguments:

We understand dues and fees are not popular. TAPA volunteers are few and your Board and Committee Chairmen have no interest in being in the “fee collection business.” The time our BPR and Chairmen spend on fees collection, we could have invested with our families or, on projects that can help grow the Company and promote long-term pilot retention. TAPA retained the Ewing Law Group, PA in Ft. Lauderdale. They follow-up with 21 Air pilots after two (2) collection attempts. Downside fees for Ewing collections are $250 for each pilot letter, added to the fees currently due. TAPA, Inc. encourages all pilots to sign a DCO form to “save the fees.”

4. Why did the Board hire an outside collection agency?

PRO

* Board and Committee Chairman can free-up to work on other initiatives.

* TAPA, Inc. does not want to be the pilot “dues or fee collection” business.

* All pilots pay a “fair share” when represented by TAPA.

CON

* “Opt-Out” means limited TAPA representation nor, any long-term TAPA benefits.

* DCO or Agency Shop fee collection add $15 per pay period or a $250 fee by letter.

* Agency Shop fees and TAPA dues - are set at the same percentage (1.5%).

Problems the Board addressed with CON arguments:

Agency shop otherwise known as “mandatory service fees” are previously agreed in the CBA. Fees are never popular during a union start-up. We get that. TAPA dues or Agency shop fees allow TAPA’s Board to contract services. Our collection firm from Ft. Lauderdale assists with TAPA dues and Agency Shop fee collections. Attny. Lee Seham and his NY firm represents TAPA for negotiations and our CBA / NMB regulatory compliance.

5. How do collected Dues and Fees create options for TAPA, Inc?

PRO

* Provides Member (pilot) representation, as needed.

* Plans a major contingency fund (MCF) for retiree medical premiums and benefits.

* Presets TAPA’s “table position” for pilot merger or other airline acquisitions.

CON

* No 21 Air, LLC seat protection or seniority for acquisitions or mergers.

* No funds to hire TAPA’s consultants or lawyers.

* Continued manipulation by the Company of the CBA.

Problems the Board addressed with CON arguments:

If 21 Air, LLC merges with another company, the smaller of the two pilot groups is often “stapled” to the bottom of the combined pilot seniority list. The TAPA, Inc. board strives for seat protections and at least “date of hire” in merger negotiations to protect your current flying job. Our legal team and consultants provide the guidance and negotiations necessary for our “table positions” and for pre-discussion talks with upcoming Sec. 6 pilot negotiations. Improving the bid and flying conditions is a collective process as TAPA’s pilots gain more practical experience flying with the 21 Air’s CBA language.

DCO Questions & Answers

1. Why are dues necessary?TAPA dues are optional, but Agency Shop fees are mandatory. Most pilots elect to pay Member dues for representation and consider these as professional fees for the right to work here. Many management pilots at other carriers, pay union dues to foster relations and the work [TAPA] provided to boost their own pay and benefits. Fees for an Agency shop, like that of TAPA are typically set at the same dues rate.

2. What does the Bylaws language say about the dues rate? To clarify, Sec. 3 Bylaws language for dues agreed in Resolution #7 passed with 100% of the pilots voting. The Board set the rate. See the bottom paragraph of Res. #7: "Administrate for pilots a TAPA deduction for dues. "TAPA Bylaws; Membership, Sec 3. Dues: "It shall be the duty of the Board of Pilot Representatives to conduct an annual review of the dues structure of the Association to determine if dues should be recommended and voted upon, or if any existing dues structure should be revised."

3. At what level is the Board involved? The TAPA Board and our Committee Chairmen simply don’t have the personal time for collection calls and prefer that all pilots check as Members on the DCO form. Non-members can’t vote and have limited representation, nor serve on TAPA Committees, or receive long-term TAPA benefits.

4. Will there be a TAPA retirement program like UPS or FedEX? In Phase I, the Board intends TAPA to be the first pilot union able to fund our retirement [pilot] medical premiums. To do this, we intend to pay insurance premiums from a major contingency fund (MCF). A large MCF is necessary, and it becomes “self-generating.” A funded MCF is one way we can lowerour pilot dues. However, all is still in the planning phases. Only TAPA Members could participate in the Retirement Care Plan (RCP). Phase II. - We are meeting with certified financial planners on how future dues growth can be used in a retirement fund. Naturally, a pilot retirement fund takes planning. However, the Board is moving aggressively towards a benefits package we can set-upby year 2023.

5. What’s the Agency Shop enforcement plan? 1. 21 Air pilots receive notice from our Payroll Committee Chairman verifying the DCO and, if no response: 2. The pilot’s file is sent to the Ewing Group, PA for collections. This law firm emails the pilot a letter for the accumulated dues and assesses fees. $15 for each pay period late and a $250 letter fee will be typical. We can’t do anything about the contracted legal fees - if you get a letter. TAPA can refund the $15 ($30 for 1-mo) on late fees - if a DCO form is completed before legal is involved. So, Member up! Finally, 21 Air’s Management supports the DCO program and states, “We will comply with the CBA.”

6. Could I just be a non-member? Sure. Some pilots do like to take a stand, pay for their own lawyers and can refuse Member benefits. That’s, OK too. Agency shop fees or dues are identical,either way. No benefits - when you opt-outand only pay Agency Shop fees. TAPA wants all pilots active as Members - in your new TAPA. Inc.

Fraternally,

John Chabriel

Payroll Committee Chairman

Karl Seuring, Tony Bless & Andrew Saridakis

TAPA President, TAPA Vice President & acting TAPA Secretary/Treasurer