Bronner: US Airways will survive war economy
The Associated Press
3/18/03 10:45 AM
MONTGOMERY, Ala. (AP) -- The chief of Alabama''s state pension fund, set to take control of bankrupt US Airways, says the airline will survive a drop in air traffic if there is a war because workers have agreed to defer 5 percent of their pay.
The seventh-largest airline''s mechanics, pilots and other workers agreed to defer the pay for up to 1½ years if there is a war with Iraq, Retirement Systems of Alabama head David Bronner said.
In the beginning, a war could have a severe effect, Bronner said. That''s why we wanted to get lots of money in the bank as a contingency.
The workers made the concessions after RSA agreed to buy a 37 percent stake in Arlington, Va.-based US Airways in August and Bronner demanded lower salaries and fewer employees.
It''s a deferment. It''s not a give-up, Bronner said.
The money will have to be paid to the workers when the company reports its first profitable quarter or at the end of 18 months, whichever comes first, company spokesman David Castelveter said Tuesday.
RSA, which invests the pension money of 280,000 active and retired state workers, expects a U.S. bankruptcy court to approve this week its plan to control the airline and return it to profitability.
In the meantime, the airline industry''s trade group said Monday it expects a war with Iraq to cause 70,000 layoffs and $4 billion of losses.
The bankruptcy court was to consider the US Airways comeback plan Tuesday, Bronner said.
Last week, U.S. Airways submitted a 15-member board to the court for its approval. The slate included eight spots controlled by the RSA, including Bronner and the RSA''s chief in-house lawyer William Stephens.
On Monday, 80 percent of the company''s creditors voted in favor of Bronner''s restructuring plan. Bankruptcy courts typically require two-thirds of creditors to agree before a plan will be considered for final approval.
US Airways has said it might go out of business by April if the plan isn''t approved by the court.
If Bronner''s plan is approved, RSA, which has $25 billion in assets, intends to invest $240 million to buy the stake in the airline, making it the largest shareholder and giving it a controlling interest.
The fund has already provided $300 million in loans so the air carrier can operate during bankruptcy proceedings.
The Associated Press
3/18/03 10:45 AM
MONTGOMERY, Ala. (AP) -- The chief of Alabama''s state pension fund, set to take control of bankrupt US Airways, says the airline will survive a drop in air traffic if there is a war because workers have agreed to defer 5 percent of their pay.
The seventh-largest airline''s mechanics, pilots and other workers agreed to defer the pay for up to 1½ years if there is a war with Iraq, Retirement Systems of Alabama head David Bronner said.
In the beginning, a war could have a severe effect, Bronner said. That''s why we wanted to get lots of money in the bank as a contingency.
The workers made the concessions after RSA agreed to buy a 37 percent stake in Arlington, Va.-based US Airways in August and Bronner demanded lower salaries and fewer employees.
It''s a deferment. It''s not a give-up, Bronner said.
The money will have to be paid to the workers when the company reports its first profitable quarter or at the end of 18 months, whichever comes first, company spokesman David Castelveter said Tuesday.
RSA, which invests the pension money of 280,000 active and retired state workers, expects a U.S. bankruptcy court to approve this week its plan to control the airline and return it to profitability.
In the meantime, the airline industry''s trade group said Monday it expects a war with Iraq to cause 70,000 layoffs and $4 billion of losses.
The bankruptcy court was to consider the US Airways comeback plan Tuesday, Bronner said.
Last week, U.S. Airways submitted a 15-member board to the court for its approval. The slate included eight spots controlled by the RSA, including Bronner and the RSA''s chief in-house lawyer William Stephens.
On Monday, 80 percent of the company''s creditors voted in favor of Bronner''s restructuring plan. Bankruptcy courts typically require two-thirds of creditors to agree before a plan will be considered for final approval.
US Airways has said it might go out of business by April if the plan isn''t approved by the court.
If Bronner''s plan is approved, RSA, which has $25 billion in assets, intends to invest $240 million to buy the stake in the airline, making it the largest shareholder and giving it a controlling interest.
The fund has already provided $300 million in loans so the air carrier can operate during bankruptcy proceedings.
