- The Washington Times - Wednesday, November 27, 2002

US Airways Group Inc. over the next three months will furlough an estimated 2,500 workers, including employees at each of the region's three major airports.
The airline made the decision yesterday two days before Thanksgiving to cut 7.1 percent of its work force in an attempt to reduce costs and emerge from bankruptcy.
It was the second round of job cuts since US Airways, the nation's seventh-largest air carrier, filed for bankruptcy protection in August. It is not clear whether it will be the last round of job cuts before year's end.
"We hope [a further reduction] is not the plan," said US Airways spokesman David Castelveter.
US Airways, based in Arlington, has eliminated 15,000 jobs since the September 11 terrorist attacks.
Flight attendants make up the biggest employee group affected by the cuts. An estimated 800 flight attendants, 700 airport workers, 500 maintenance workers, 330 reservation agents and 60 pilots will lose their jobs. The airport workers include ticket agents and baggage handlers.
Mr. Castelveter said the company hopes the flight attendant furloughs will be voluntary.
US Airways will lay off 33 workers at Ronald Reagan Washington National Airport, 14 at Washington Dulles International Airport and 13 at Baltimore-Washington International Airport.
US Airways will close a heavy-maintenance hangar in Tampa, Fla., and a reservation center in Orlando, Fla. Employees with seniority will be offered positions at offices in Pennsylvania and North Carolina.
The Tampa maintenance hangar will close immediately, and work will be shifted to US Airways facilities at Charlotte, N.C., and Pittsburgh. The carrier maintains a fleet of 279 aircraft. The Orlando reservation center will close Jan. 10, and work will move to Pittsburgh and Winston-Salem, N.C.
US Airways President and Chief Executive David Siegel said the airline has begun meeting with its labor union leadership to identify work-rule changes and other cost-saving initiatives.
Mr. Castelveter declined to say how much the airline hoped to save by altering labor agreements or by furloughing 2,500 workers.
The head of the Association of Flight Attendants executive council said the union won't agree to concessions until management consents to changes.
"The flight attendants will not consider the new financial crisis to be serious enough until management takes further wage and benefit cuts, extends those cuts through the term of the [Air Transportation Stabilization Board] loan process and management concludes negotiations over further cuts with the other labor groups," said Perry Hayes, US Airways master executive council president of the Association of Flight Attendants.
Mr. Siegel said the job cuts and labor negotiations are part of the company's final push to cut fourth-quarter costs.
The Air Transportation Stabilization Board was created after September 11 and charged with determining which airlines would qualify for $10 billion in federal loan guarantees.
US Airways listed $10.65 billion in liabilities and $7.81 billion in assets when it filed for Chapter 11 bankruptcy protection. The company said at the time it had to reduce expenses by at least $1.2 billion a year. Mr. Castelveter said the company now must cut expenses by $1.6 billion a year.
Company officials must outline a list of cost-saving measures by the time it files a reorganization plan with a bankruptcy judge on Dec. 20.
"The clock is ticking," Mr. Castelveter said.
The company hopes to emerge from bankruptcy by March.
US Airways has 35,000 employees, down from 49,000 before the September 11 terror attacks.
The carrier lost $335 million in the third quarter, which ended Sept. 30, an improvement from its $766 million loss during the third quarter last year.
US Airways, as the largest carrier at Reagan Airport, was hit hard by the terror attacks because that airport was shut for three weeks after September 11.
The airline has approval from the Air Transportation Stabilization Board for $900 million in loan guarantees on the condition that it emerges from bankruptcy. It also has received bankruptcy court approval allowing the Retirement Systems of Alabama to invest $240 million in the cash-starved company in return for a 37.5 percent stake in the restructured company.
US Airways stock was unchanged at 55 cents a share yesterday in over-the-counter trading. The price of its shares has fallen 91 percent this year.


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