US Airways talks with pilots collapse - union

Mon Aug 23, 2004
By John Crawley

WASHINGTON, Aug 23 (Reuters) - Negotiations between US Airways (UAIR.O: Quote, Profile, Research) and its pilots union over a new round of steep concessions collapsed on Monday, heightening pressure on the carrier as it tries to avert insolvency.

Jack Stephan, a spokesman for the company's chapter of the Air Line Pilots Association, said more than a week of discussions between the two sides at the airline's Arlington, Va., headquarters yielded little progress.

"Since the beginning of these talks, we have witnessed a disturbing trend by the company to seemingly dismiss several significant proposals from our pilot negotiators," Stephan said. "Instead, management has responded by 'piling on' additional demands to their counterproposals."

The latest round of negotiations, due to end last Friday but extended through the weekend, ended on Sunday with the two sides far apart on the dollar value of a new package.

The union's negotiating committee met internally on Monday and declared the talks at an impasse. The union and the company said no new negotiations were scheduled.

Mindful of the airline's wish to complete concession agreements with its unions by early September, pilot negotiators agreed to present the company's latest proposal to senior union executives, who will then decide whether to seek ratification from the general membership.

US Airways is seeking nearly $300 million in givebacks from pilots, which would represent nearly half of the package it wants from all union workers to avert a second bankruptcy filing in two years. The centerpiece of the giveback plan is a proposed 16 percent pay cut.

US Airways faces mid-September deadlines for making nearly $1 billion in payments to cover pension obligations and the next installment on its federal loan guarantee.

The company hopes to avoid bankruptcy or worse by quickly implementing a restructuring plan out of court. US Airways wants $1.5 billion in overall cost savings, including the $800 million from workers.

No concession agreements have been reached with flight attendants, mechanics, ticket agents or baggage handlers, the company said. Even if a deal is eventually reached with the pilots, the airline must still strike agreements with the other employee groups to avoid bankruptcy.

David Castelveter, an airline spokesman, said US Airways has negotiated with the pilots in good faith. "ALPA is well aware of the need for us to successfully implement the transformation plan as quickly as possible," he said of efforts to restructure the company outside of court.

Stephan said the union was mindful of the time constraints. "They have some options in front of them," he said of the ALPA executive committee.

At least one major credit rating agency, Standard & Poor's, last week downgraded US Airways debt deeper into "junk," pessimistic about the chances of reaching giveback agreements.




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