US Airways and ALPA Reach Agreement on Additional Cost Cuts

Old Dec 11, 02, 8:46 am
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US Airways and ALPA Reach Agreement on Additional Cost Cuts

US Airways and ALPA Reach Agreement on Additional Cost Cuts

Wednesday December 11, 8:43 am ET

Company Says Agreement is Huge Catalyst Toward Successful Chapter 11 Emergence
Talks with Other Unions Continue

ARLINGTON, Va., Dec. 11 /PRNewswire-FirstCall/ -- US Airways and the Air Line Pilots Association (ALPA) have reached a tentative agreement on additional cost savings that will save the company approximately $100 million annually, plus additional pension relief, paving the way for resolution on productivity agreements with the airline's other unions, and keeping in place its schedule to meet the final conditions for a federal loan guarantee and to file its plan of reorganization by Dec. 20, 2002.

The tentative agreement is subject to ratification by the ALPA's US Airways Master Executive Council (MEC).

David Siegel, US Airways president and chief executive officer, said that during intense talks, the negotiators for the airline's MEC "showed tremendous leadership and a keen understanding of what was required in order to successfully complete our Chapter 11 reorganization."

"We continue to work to secure final approval of our loan guarantee from the Air Transportation Stabilization Board (ATSB) and file our plan of reorganization by December 20," said Siegel. "Our pilot union negotiators worked with us in the interest of identifying additional cost savings, and preserving jobs and pensions, and we greatly appreciate their efforts."

Siegel said that ALPA will be communicating directly to its members about the details of the package, which includes a combination of productivity improvements, benefit and pension savings and some temporary wage concessions. The company had proposed a package of cost reductions entirely from productivity improvements, but ALPA responded by agreeing to phase-in productivity changes through attrition in order to prevent more furloughs, and to take some additional temporary wage cuts. "We respect ALPA's desire to come up with some creative solutions that will preserve as many pilot jobs as possible, given the rather bleak outlook for airline employment right now," said Siegel.

In exchange, the company has committed to raise the minimum aircraft in the mainline fleet from 245 to the current fleet of 279. In addition, the company will make MidAtlantic Airways, its new regional jet subsidiary, a division of US Airways, further solidifying its commitment to create positions for furloughed mainline employees.

US Airways mainline employees on furlough will be assigned to work the regional jets that will be flown by MidAtlantic at competitive regional airline rates and benefits, but allowing them to keep their seniority number and providing for coordination of staffing.

Dr. David Bronner, the chief executive of the Retirement Systems of Alabama, and the primary lender to US Airways during its reorganization, praised the news of the agreement between ALPA and the airline. "I continue to have every confidence that all employees will step up to this latest challenge and work constructively with management to find the additional cost savings that are needed to secure the ATSB loan," said Bronner. "The cooperation between labor and management and their long-term outlook to secure success for the airline were primary reasons for our decision to invest in the company."

Siegel said that discussions continue with the International Association of Machinists, the Communications Workers of America, the Transport Workers Union, and the Association of Flight Attendants.

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