- Banned
- #1
Proposal divides group seen as key to success of cost-cutting efforts
TED REED AND STAN CHOE
Staff Writers
US Airways has asked its pilots to accept pay cuts as high as 30 percent, a proposal that has re-exposed schisms among pilots. Delays in reaching a deal with pilots could threaten the airline's fragile model for avoiding a bankruptcy filing.
Pilot negotiators were preparing a response on Thursday, said Jack Stephan, spokesman for the US Airways chapter of the Air Line Pilots Association. He wouldn't characterize the airline's proposal, but noted: "It's a proposal. That's all it is. They are still talking."
Quick approval of a pilot deal is crucial as the airline races to secure deals with four major unions by late September. But divisions in the pilots union could further slow the pace of negotiations and pilot voting on a tentative agreement.
Pilot negotiators are ensconced in an Arlington, Va., hotel while company negotiators are stationed at the Crystal City headquarters. The teams, communicating through phone and e-mails and meetings, will be in touch today and may talk over the weekend.
US Airways Chairman David Bronner said this week the airline, which has its largest hub in Charlotte, will seek bankruptcy protection if it doesn't have deals with all four unions within 30 days. Bankruptcy would likely lead to liquidation, because no other investor would want to take a chance, he said.
On Thursday, Chief Executive Bruce Lakefield sought to calm fears sparked by Bronner's comments and by a consultant's report for the pilots union that warned of an almost certain bankruptcy and a potential liquidation by spring.
Chapter 11 bankruptcy remains a possibility, Lakefield said in a letter to employees. But "talk of an imminent shutdown, a disruption of service or impending liquidation is simply not true," he wrote. "Chapter 11 protection can be a useful tool," he said.
A bankruptcy filing could resolve two issues that plague the airline. A pension payment of about $130 million, due Sept. 15, could be delayed. And under bankruptcy law, a court could set aside existing labor contracts and force negotiations on new ones.
The airline has not seen a decline in bookings or an increase in frequent flier mile redemptions, a US Airways spokeswoman said Thursday.
US Airways, the nation's seventh largest carrier, is struggling because of high fuel costs and competition from low-fare carriers. Despite completing a bankruptcy reorganization in 2003, it continues to lose money. It is seeking $1.5 billion in annual cuts, including $800 million from labor -- its third round of concessions in two years.
The airline's proposal to pilots this week includes pay cuts of 30 percent if pilots retain their recently created pension plan and 16.5 percent if they agree to close it, pilot sources said. It also included 95 hours of flying a month, a productivity increase that could lead to pilot furloughs.
Earlier, pilots offered pay cuts of 12.5 percent and 93 hours a month of flying.
Currently, the captain of a Boeing 737 jet, the most common plane in US Airways' fleet, makes about $150,000 annually and flies a maximum 85 hours a month. A 30 percent cut would mean a $105,000 salary.
On Thursday, one pilot said he'd reject the proposal and another said he'd accept it. They asked not to be named because airline policy prohibits them from talking to the media.
"We're tired of our careers being decimated to save the company," said a Philadelphia-based pilot. "We're already operating under draconian conditions. No way will I vote for the proposal on the table."
But another Philadelphia-based pilot said the airline's proposal "doesn't fill me with warm fuzzies, but it has to be approved. Management has never taken the necessary steps to fix this airline."
The wedge among pilots is reflected in long-standing divisions in the leadership of the US Airways chapter of the Air Line Pilots Association. Historically, pilots from Charlotte have been moderate while pilots from Pittsburgh and Philadelphia have been hardliners. US Airways has about 1,200 pilots based in Philadelphia, 1,000 in Charlotte, 700 in Pittsburgh, 300 in Washington and 100 each in Boston and New York.
On Thursday, Philadelphia pilot leaders sent pilots an e-mail decrying the airline's approach to negotiations, saying it includes delays in providing information to them. US Airways has also failed to fairly value the concessions it is seeking, the leaders said. The carrier wants $295 million in concessions from pilots.
In a taped message, Bill Pollock, who heads the US Airways pilots, said he is disturbed that some pilot leaders "still maintain the urgency of the situation has been manufactured."
Pollock, viewed as a moderate leader committed to making a deal, said the negotiations are critical and could be "our last opportunity to control the fate of the airline and our careers."
Pilot talks are the key to the airline's efforts to negotiate cost concessions with its unions, said Windham, N.H., airline consultant Ernest Arvai.
"Pilots represent the bulk of an airline's labor costs, and that's why they're the key group to get concessions from," he said.
TED REED AND STAN CHOE
Staff Writers
US Airways has asked its pilots to accept pay cuts as high as 30 percent, a proposal that has re-exposed schisms among pilots. Delays in reaching a deal with pilots could threaten the airline's fragile model for avoiding a bankruptcy filing.
Pilot negotiators were preparing a response on Thursday, said Jack Stephan, spokesman for the US Airways chapter of the Air Line Pilots Association. He wouldn't characterize the airline's proposal, but noted: "It's a proposal. That's all it is. They are still talking."
Quick approval of a pilot deal is crucial as the airline races to secure deals with four major unions by late September. But divisions in the pilots union could further slow the pace of negotiations and pilot voting on a tentative agreement.
Pilot negotiators are ensconced in an Arlington, Va., hotel while company negotiators are stationed at the Crystal City headquarters. The teams, communicating through phone and e-mails and meetings, will be in touch today and may talk over the weekend.
US Airways Chairman David Bronner said this week the airline, which has its largest hub in Charlotte, will seek bankruptcy protection if it doesn't have deals with all four unions within 30 days. Bankruptcy would likely lead to liquidation, because no other investor would want to take a chance, he said.
On Thursday, Chief Executive Bruce Lakefield sought to calm fears sparked by Bronner's comments and by a consultant's report for the pilots union that warned of an almost certain bankruptcy and a potential liquidation by spring.
Chapter 11 bankruptcy remains a possibility, Lakefield said in a letter to employees. But "talk of an imminent shutdown, a disruption of service or impending liquidation is simply not true," he wrote. "Chapter 11 protection can be a useful tool," he said.
A bankruptcy filing could resolve two issues that plague the airline. A pension payment of about $130 million, due Sept. 15, could be delayed. And under bankruptcy law, a court could set aside existing labor contracts and force negotiations on new ones.
The airline has not seen a decline in bookings or an increase in frequent flier mile redemptions, a US Airways spokeswoman said Thursday.
US Airways, the nation's seventh largest carrier, is struggling because of high fuel costs and competition from low-fare carriers. Despite completing a bankruptcy reorganization in 2003, it continues to lose money. It is seeking $1.5 billion in annual cuts, including $800 million from labor -- its third round of concessions in two years.
The airline's proposal to pilots this week includes pay cuts of 30 percent if pilots retain their recently created pension plan and 16.5 percent if they agree to close it, pilot sources said. It also included 95 hours of flying a month, a productivity increase that could lead to pilot furloughs.
Earlier, pilots offered pay cuts of 12.5 percent and 93 hours a month of flying.
Currently, the captain of a Boeing 737 jet, the most common plane in US Airways' fleet, makes about $150,000 annually and flies a maximum 85 hours a month. A 30 percent cut would mean a $105,000 salary.
On Thursday, one pilot said he'd reject the proposal and another said he'd accept it. They asked not to be named because airline policy prohibits them from talking to the media.
"We're tired of our careers being decimated to save the company," said a Philadelphia-based pilot. "We're already operating under draconian conditions. No way will I vote for the proposal on the table."
But another Philadelphia-based pilot said the airline's proposal "doesn't fill me with warm fuzzies, but it has to be approved. Management has never taken the necessary steps to fix this airline."
The wedge among pilots is reflected in long-standing divisions in the leadership of the US Airways chapter of the Air Line Pilots Association. Historically, pilots from Charlotte have been moderate while pilots from Pittsburgh and Philadelphia have been hardliners. US Airways has about 1,200 pilots based in Philadelphia, 1,000 in Charlotte, 700 in Pittsburgh, 300 in Washington and 100 each in Boston and New York.
On Thursday, Philadelphia pilot leaders sent pilots an e-mail decrying the airline's approach to negotiations, saying it includes delays in providing information to them. US Airways has also failed to fairly value the concessions it is seeking, the leaders said. The carrier wants $295 million in concessions from pilots.
In a taped message, Bill Pollock, who heads the US Airways pilots, said he is disturbed that some pilot leaders "still maintain the urgency of the situation has been manufactured."
Pollock, viewed as a moderate leader committed to making a deal, said the negotiations are critical and could be "our last opportunity to control the fate of the airline and our careers."
Pilot talks are the key to the airline's efforts to negotiate cost concessions with its unions, said Windham, N.H., airline consultant Ernest Arvai.
"Pilots represent the bulk of an airline's labor costs, and that's why they're the key group to get concessions from," he said.
:down: to bad so sad at least they have a job,I was layed off to support
