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Unions asked for interim relief
Thursday, September 23, 2004

Bankrupt carrier US Airways asked its unions yesterday for emergency relief from the company's labor contracts, a move that would allow the airline to cut costs and preserve much-needed cash during a slow travel season.

  

US Airways Watch

U.S. Sens. Rick Santorum and Arlen Specter plan to meet today with four pilot union representatives from Pennsylvania. The get-together comes a week after Santorum lashed out at the representatives, charging them with "trying to take the airline down" after they blocked members from voting on a company contract proposal in early September.

The passengers service workers union is scheduled to meet with the company Monday, more than a month after the last bargaining session on Aug. 11. Union officials said yesterday that the failure to meet with the company since then had become a "source of frustration" for the union's negotiating team. The machinists union met with the company this week in Cincinnati.

Brazilian regional jet maker Embraer said yesterday that it would probably cut its delivery targets for this year and next due to US Airways' bankruptcy filing. Embraer recently suspended the delivery of 63 aircraft to the airline pending additional negotiations. It had planned to deliver 14 this year and 49 between 2005 and 2006.

US Airways has laid off 27 nonunion sales and marketing employees in its Arlington, Va., headquarters.
 

 
The interim relief, if granted, would also result in immediate pay cuts for most of US Airways' 28,000 employees, including 7,600 in the Pittsburgh area.

If unions do not "immediately" grant US Airways' request, Chief Executive Officer Bruce Lakefield said in a message to employees, the company intends to ask U.S. Bankruptcy Court tomorrow for authority to grant the emergency relief. The court would then set a hearing to consider the request.

Lakefield did not say how long the interim cuts would last or give them a dollar value.

The only employees exempt from US Airways' request are 150 dispatch workers who reached a tentative, $4.5 million cost-cutting agreement with the company on Tuesday. But the company still lacks new cost-cutting deals with pilots, flight attendants, machinists, passenger service workers, flight crew training instructors and flight simulator engineers. Before bankruptcy, the airline asked for $800 million in concessions from all groups.

US Airways intends to pursue permanent agreements with its unions outside bankruptcy court, but Lakefield said the company needs emergency cuts to protect the cash it has on hand, derived from a government-backed loan. US Airways' cash must stay above certain levels for the next month -- $600 million on Sept. 24 , $550 million on Oct. 1, $575 million on Oct. 8, $585 million on Oct. 15 -- or it could lose access to its bankruptcy financing.

Word of US Airways' emergency request yesterday came hours after its pilots union authorized a new set of negotiations with the bankrupt carrier, giving union negotiators the freedom to hammer out a permanent cost-cutting agreement. Pilots spokesman Jack Stephan said the decision provided "renewed momentum" to the talks, which ended when the airline filed for bankruptcy on Sept. 12.

On Monday, the company asked the pilots for a 19.5 percent pay cut, reduction in vacation time, cut in retiree health care and pilot furloughs, regardless of seniority, if the airline reduces its fleet.

First published on September 23, 2004 at 12:00 am
Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.