US Airways' machinists union officially approved $353 million in annual concessions last night, the final piece in the airline's critical push for $1 billion in new labor savings.

The cuts, approved by more than 60 percent of mechanics and baggage handlers who voted, will slash pay, pare benefits, eliminate pensions and trim thousands of jobs.

Members voted on the five-year pact knowing the U.S. Bankruptcy Court already had tossed out contracts covering 8,800 workers, freeing the airline to impose whatever cuts it wanted. "The vote came down to choosing between bad and worse," said machinist official Bill O'Driscoll.

US Airways "has everything it needs from labor to succeed," Robert Roach, general vice president of the International Association of Machinists, said after the ballots had been counted on what had been the company's final offer. "The pressure is now on management to deliver."

Indeed, the nation's seventh-largest carrier now has everything it sought when filing Chapter 11 bankruptcy last September, including deep cuts in employee pensions and retiree health coverage along with hundreds of millions in savings from its pilots, flight attendants and customer service agents.

If it is able to attract an additional $250 million in outside financing by June 30, the troubled airline may be able to reemerge from the protection of bankruptcy court as a stronger, leaner, more competitive player in a turbulent industry that continues to bleed red.

"The outlook for US Airways is much brighter now that we have secured these new labor agreements," said David Bronner, the airline's chairman and head of the Alabama state employee pension fund that owns a controlling stake in US Airways.

The challenge of the next few months will be to survive a brutal fare war set in motion by Delta Air Lines, withstand fluctuations in fuel prices, overcome heightened competition from discount rival Southwest Airlines and convince customers that US Airways is around for good.

The Arlington, Va.-based airline, which has more than 6,000 employees in the Pittsburgh area, is already planning advertisements for its major markets reminding fliers that the airline's worst days are over and it is now safe to book tickets in advance.

"They have to send the message to the competition that they are not dead," said Colorado aviation consultant Mike Boyd.

US Airways must also find a way to sooth the ill will among employees who feel the company overreached in its search for pay and benefit cuts -- its third such request in three years, Boyd said. Thousands of jobs could still be lost as a result of the agreement ratified by the machinists yesterday.

"The real issue is getting the customer to really want to fly US Airways," Boyd said, "and that means making sure employees and management, when they walk out the door onto the concourse or an airplane, are united in trying to keep the customer happy."

Almost a month ago, US Airways looked to the public like an airline on the brink of collapse.

A Christmas travel meltdown stranded thousands of passengers, delayed hundreds of flights and misplaced more than 10,000 bags, and some observers predicted that US Airways was too weak to survive a sudden drop in consumer confidence. The incident was widely seen as an embodiment of the airline's complex financial problems.

"Stick a fork in them, folks," airline industry observer Terry Trippler said at the time. "They're done."

The announcement early this month that Southwest in May would move into Pittsburgh, US Airways' third-busiest airport after its hubs in Charlotte, N.C., and Philadelphia, only added to the drum roll of downbeat news.

But in a matter of weeks, the conventional wisdom has shifted again, with many now believing that US Airways will become the second major airline -- the other being Continental Airlines -- to survive two bankruptcy filings and fly again.

Two of the airline's largest creditors, the federal government and General Electric, recently granted US Airways key agreements that ensure its access to cash through June 30, as long as it meets certain milestones and keeps its cash above certain levels week to week.

And, of course, the pact with the machinists finishes the work the airline has sought to wrest the concessions it has maintained it must have to survive and emerge as a more cost-efficient and competitive carrier.

"Reports of US Airways' imminent demise have been greatly exaggerated," UBS Securities airline analyst Robert Ashcroft wrote in a research note last week. "The lesson is, as always, that airlines are a lot harder to eliminate than we might think."

In the same report, however, Ashcroft warned that US Airways is "by no means out of the woods."

The national trend towards cheap fares is forcing the carrier to slash prices in certain markets, cuts that won't help it generate profits even if it is able to lure more customers. Just in the last week, US Airways announced two special sales with prices as low as $49 each way.

Its planes are more crowded than they were a year ago, but the discounts are costing US Airways money. Take December, when the company said revenue generated by flying one seat one mile dropped 10.5 percent to 11.5 percent compared with December 2003.

US Airways is expected to report soon that it lost more than $700 million in 2004, but it is hardly alone in posting red ink. The only big U.S. carrier making money is Southwest Airlines, which recently reported a fourth-quarter 2004 profit of $56 million due to favorable fuel contracts it locked in years ago.

Delta Air Lines, Continental Airlines, American Airlines, Northwest Airlines and America West Airlines all reported major losses in the last week. And Delta's $5.2 billion for the year was the single-highest annual loss ever posted by a U.S. airline, reflecting the damage done by high fuel costs and low fares. Collectively, the industry has lost $30 billion since January 2001, and analysts expect it to lose at least $2 billion again this year.

Analysts warn that labor cuts alone are not enough to guarantee success for US Airways.

In its last bankruptcy, in 2002-03, US Airways also won $1 billion in concessions. But soon after reemerging, it said it had underestimated the threat from discount carriers such as JetBlue Airways and Southwest, which launched its Philadelphia service last year. Even with the cuts, its operating costs remained among the industry's highest, so it said it had no choice but to go back for more.

With that first bankruptcy and the troubles of the industry still fresh in their minds, some employees are still not convinced this is the last time US Airways will ask them to sacrifice pay and benefits for the good of the company -- even though some of the new contracts do reinstate wage increases and some benefits after the first two years.

"They are just like junkies," said Aliquippa mechanic Dan Kovolenko, before voting against the new concessionary package ratified by his union last night. "They keep coming back for more and more."