It should be noted, even after the 29% wage cut, UA 737/A319/320 pilots still make more then the new America West contract, with vastly better work rules, and retirement.


PHOENIX -- Pilots at America West Airlines overwhelmingly rejected a tentative labor contract reached in December between the company and the union, citing shortcomings in job security and retirement benefits.

Of the 1,476 pilots eligible to vote, 97% participated and 73% voted against the proposed three-year pact that offered an 11% pay raise at the date of signing and an additional 3% raise in January 2005.

"Given the state of the industry, pilots were not dissatisfied with that [pay raise]. They thought that was fair," said Captain Peter Blandino, acting chairman of the America West unit of the Air Line Pilots Association (News - Websites).

"The things that generated the 'no' vote were shortcomings in particularly job security and lack of retirement (benefits)," added Mr. Blandino, who said pilots unsuccessfully sought a defined benefit plan in addition to the 401(k) program they have now, and remain concerned that their job security is hurt by the level to which the airline can outsource flying to other carriers.

In their negotiations with the airline, a unit of America West Holdings Corp. (NYSE:AWA - News; AWA), pilots had sought increased pay, more flexible flight schedules, greater retirement benefits and better job security. The proposed contract had some improvements, including more flexible flight schedules, but "fell short of expectations," said Mr. Blandino.

America West said it was disappointed with the vote "particularly given the economic realities facing our industry and our company today," said W. Douglas Parker, chairman and chief executive. "While other airlines continue to seek concessionary contracts with their employees, our agreement included an immediate 11% wage rate increase and work-rule enhancements."

Keeping labor costs in check is critical at America West. In exchange for a government loan-guarantee in early 2002 from a Congress-formed board set up to assist ailing airlines, Mr. Parker promised in Washington to keep labor-cost increases in line with projections in the company's business plan or be forced to repay part of the loan early.

Mr. Blandino said he'll have a clearer idea of the 1,700 pilots' continuing contract-related concerns when the union polls the membership. The union will petition to the mediation board to resume negotiations as quickly as possible in hopes of reaching another agreement, he said.

America West made it clear that ongoing events will affect how it proceeds. " Whenever we eventually restart these negotiations, the discussions will necessarily be framed by the economic realities facing America West and the industry at that time," said the CEO.

America West's pilots began negotiating with management in February 2000 just prior to the May 2000 amendable date of their current, six-year-old contract. In May 2001, the airline filed for federal mediation amid strained negotiations. After the National Mediation Board assigned a federal mediator, talks were suspended after the Sept. 11, 2001, terrorist attacks and resumed in March of last year until the union and management reached a tentative pact in December.