- The Washington Times - Thursday, December 12, 2002

From combined dispatches
US Airways is hoping a tentative deal reached yesterday with its pilots for a second round of concessions that will save the company $100 million a year will spur other unions to follow suit.
The pilots' concessions are key to the bankrupt airline's plans to achieve an additional $200 million to $400 million in cost cuts it says it needs to secure a federal loan guarantee and restore profitability when it emerges from bankruptcy next year.
The pilots previously agreed to $465 million in wage concessions, which eliminated pay raises of 17 percent and 16 percent the pilots received in 2001 and 2002, and made further cuts.
Overall, the airline said before yesterday's agreement that it had cut annual costs by $1.3 billion, with $840 million of that coming from employees.
The Arlington-based airline initially thought those cuts would be sufficient, but rising fuel costs, continued weakness in the overall industry and the threat of war with Iraq forced the company to change its estimates. It now says it needs cuts of $1.4 billion to $1.6 billion a year.
The company lost $2.1 billion on revenue of $8.3 billion in 2001. US Airways shares rose 2 cents to 52 cents in New York. The stock has dropped 92 percent this year.
Jerry Glass, the airline's senior vice president for employee relations, said the pilot deal will likely save more than $100 million because of changes to the pension formula and other benefits that are more difficult to quantify exactly.
He said the airline is asking the other unions, including those representing flight attendants, mechanics and gate workers, to make additional concessions of $100 million a year.
The pilots' agreement should provide momentum to talks with the other groups, he said.
"The pilots are the leaders of this airline," Mr. Glass said. "When they step up and do what they did, all the other employees take notice."
More than 1,800 of the airline's 6,000 pilots are on furlough or scheduled for furlough.
US Airways President and Chief Executive Officer David Siegel praised union leaders for showing "tremendous leadership and a keen understanding of what was required in order to successfully complete our Chapter 11 reorganization."
Freundlich said. The layoffs are so deep that pilots with 15 years of experience are being furloughed.
As part of the agreement, the airline agreed to raise its minimum fleet size from 245 jets to 279 jets. In addition, the company said its new regional jet division, MidAtlantic Airways, will be a division of US Airways.
The Air Transportation Stabilization Board has given US Airways tentative approval of a $1 billion loan package, 90 percent of which is guaranteed by the federal government. But the approval is conditioned upon the airline implementing a successful business plan.

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