- The Washington Times - Friday, March 14, 2003

Negotiators for bankrupt US Airways expect to use an arbitrator to resolve a pension dispute with the pilots' union if they fail to reach an agreement by the end of this month, sources close to the negotiations said this week.
US Airways' pilots are in danger of losing pension benefits as their employer grapples for ways to cut costs and stay in business.
Arlington-based US Airways is trying to persuade a bankruptcy judge in Alexandria to authorize a reorganization plan that includes terminating a pension plan for about 8,000 active, retired and furloughed pilots.
"We are in negotiations with the pilots to resolve the pension issue," said Dave Castelveter, US Airways spokesman.
The Air Line Pilots Association is arguing during negotiations this week that an independent actuary should be hired to review management's figures projecting huge deficits from the current pension plan.
The union also said any "follow-on plan" US Airways uses to replace the current pensions must be based on more realistic numbers.
"The actuarial review is very important to us to make sure the company's numbers and the models for generating those numbers are realistic," said Roy Freundlich, ALPA spokesman.
"We are not convinced those numbers are completely authentic. The pilots already have borne an unfair percentage of the restructuring," he said.
The U.S. Bankruptcy Court has scheduled a confirmation hearing for the airline's reorganization plan for next Tuesday through Thursday.
The Air Transport Association, the trade group for major airlines, warned this week that their industry's problems would worsen greatly in another war with Iraq.
The airlines are asking financial assistance from the federal government.
Bankruptcy Judge Stephen Mitchell ruled March 1 that US Airways could terminate its pilots' pension plan only if the termination did not violate the federal Railway Labor Act.
The act forbids government interference with collective-bargaining rights.
An agreement to resolve disputes arising in collective bargaining is required before the Pension Benefits Guaranty Corp., a government agency that regulates pensions, will approve any new plan.
Sources close to the negotiations said an arbitrator could be brought in as soon as next week if no final agreement is reached between US Airways and ALPA.
The airline says it could face liquidation unless it can replace its pension plan with a less-expensive version.
The airline wants to replace the pilots' pension plan, which it says would cost $1.6 billion over the next seven years, with an $850 million plan. The airline's 3,500 pilots argue the reduced plan would put pilots at financial risk if it underperforms from a lack of contributions or poor returns on investments.
Pensions for all of the airline's employees are expected to cost $3.1 billion over the next seven years.
ALPA filed an objection in court this week to the reorganization plan.
US Airways has set a goal of emerging from bankruptcy protection by March 31. It filed for protection from creditors in August 2002.
If the airline meets its goal, it would qualify for a $900 million federal loan guarantee, which private lenders said is required before they would give the airline $1 billion in loans.
The main obstacle has been high operating costs. Employee wages and benefits, such as the pension plan, make up about 40 percent of an airline's costs.
The objection filed by ALPA questioned the propriety of US Airways making large payments to former executives while trying to reduce employee benefits.
They pointed out in their objection that US Airways plans to pay $15 million each to former executives Rakesh Gangwal and Steven Wolf. Former general counsel Lawrence Nagin would get a $5 million payment.
Unlike the airline's zeal for cutting employee expenses, the union said, the airline "has not analyzed or considered possible actions to recover such sums."

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