- The Washington Times - Thursday, December 2, 2004

The union representing 6,000 reservation and customer service agents at US Airways yesterday reached a tentative agreement on a new labor contract, just as attorneys for the airline were seeking bankruptcy court approval to void labor contracts.

The Arlington-based air carrier returned to bankruptcy court yesterday in its attempt to annul three labor contracts covering more than 20,000 workers, pensions of 53,000 current and former workers and cut the medical benefits for nearly 11,000 retirees in search of nearly $1.08 billion in savings to stay in business.

While the company defended its plan to scrap the agreements, US Airways appeared on the cusp of an agreement with the Communications Workers of America, the union that represents 6,000 reservation and customer service agents.

Following an afternoon break yesterday, US Airways lead bankruptcy attorney Brian Leitch asked U.S. Bankruptcy Judge Stephen S. Mitchell to adjourn the hearing. Not only had the company run out of witnesses for the day, but “time will be better spent” in negotiations, he said.

That followed a not-so-secretive passing of a note from the legion of US Airways attorneys to Daniel Katz, the attorney for the Communications Workers of America, who sat on the opposite side of the courtroom among the gaggle of attorneys representing labor groups.

US Airways sought from $137 million to $142 million in concessions from reservation and customer service agents. The union said US Airways wanted to outsource 800 jobs of its reservation agents to India, and the union tried to preserve some of those positions.

“I think we were able to push back and offset some of the most extreme demands the company asked for,” CWA spokesperson Candice Johnson said.

Miss Johnson declined to discuss details of the contract, but the proposals from the airline called for pay cuts as high as 34 percent.

CWA negotiators will recommend that workers approve the contract. A ratification vote hasn’t been scheduled.

A tentative agreement between US Airways and its reservation and customers service agents is significant because the union threatened to strike if Judge Mitchell voided its labor contract at the conclusion of the hearing.

“I truly think agents were frustrated and unhappy with the way negotiations were going,” Miss Johnson said.

US Airways has always questioned the union’s right to strike, in light of the Railway Labor Act, which prohibits a strike before mediation. But the union determined that it would be within its right to strike once the judge annulled its labor agreement.

US Airways Vice President Chris Chiames said the airline will seek an injunction from Judge Mitchell to prevent the unions from striking if he cancels their labor contracts. Lawyers for US Airways will file the motion by early next week.

Negotiators for the Association of Flight Attendants and International Association of Machinists and Aerospace Workers continue talks on wage and benefit concessions.

“Talks are progressing. Can I say we’re close? I can’t say that,” said Teddy Xidas, president of the Association of Flight Attendants Local 40, which represents 1,150 US Airways flight attendants based in Pittsburgh, and president-elect of the union’s master executive council.

US Airways, the nation’s seventh-largest carrier, filed for bankruptcy Sept. 12 after failing to reach agreements with all its unions on wage and benefit cuts. The company only secured agreements with the Air Line Pilots Association and Transport Workers Union, which represents engineers, dispatchers and flight crew trainers, saving it $340 million annually.

Mr. Leitch said at yesterday’s bankruptcy court hearing that US Airways has no alternative and must have the labor agreements, pension plans and medical benefits eliminated or it will be forced to liquidate by mid-January.

He also said US Airways would continue negotiating with its unions.

“It is likely, almost to the point of certainty, that sometime in the middle of January the airline will have to begin the orderly process of liquidation” unless the company cuts labor costs by reaching new labor agreements or having the contracts voided, Mr. Leitch said.

In a new bankruptcy court filing this week, US Airways said it lost $189 million during the six-week period ending Oct. 30.

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