- The Washington Times - Wednesday, March 27, 2002

ASSOCIATED PRESS
US Airways CEO David Siegel is warning employees that the struggling airline can no longer afford to pay salaries comparable to those at its largest competitors.
Most US Airways workers, with the exception of flight attendants, have contracts that call for salaries of "parity plus one," which is the average pay given to employees of the four largest airlines, plus 1 percent.
In a recorded message to employees yesterday, Mr. Siegel said the company will continue to meet its contractual obligations for now. But he warned that management may soon seek across-the-board concessions from its unions.
"Continuing to tie our compensation plan to those of the four largest U.S. carriers does not make a lot of sense in today's airline industry environment," Mr. Siegel said. "These carriers are much larger than US Airways. They have many more assets and enjoy far greater financial strength."
Arlington-based US Airways is the nation's seventh-largest airline. It had been sixth until it reduced capacity and jobs by 23 percent last year.
UAL Corp., the parent company of United Airlines, has been seeking wage concessions from employees for several months.
US Airways was hit particularly hard by the industrywide downturn after September 11. The airline already had been struggling after a failed merger with United, and it was the largest carrier at Ronald Reagan Washington National Airport, which remained closed for several weeks after the attacks.
The airline lost $2 billion in 2001.
Roy Freundlich, a spokesman for the Air Line Pilots Association's US Airways unit, said the union would reject any efforts to extract pay concessions.
"Employees are not the cause of US Airways' current problems or its current size," Mr. Freundlich said. "The size of an airline does not indicate its financial strength, its service level … or its profit potential."
Mr. Siegel, a former Continental Airlines executive who took over as US Airways' president and CEO earlier this month, met last week with leaders of the unions representing mechanics, engineers and flight attendants. He meets with the pilots' union this week.


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