- The Washington Times - Thursday, December 23, 2004

ASSOCIATED PRESS

Reservations and gate agents at US Airways approved a new contract yesterday that cuts pay by 13 percent and provides the airline some of the relief it says is needed to avoid imminent liquidation.

The Communications Workers of America (CWA), which represents nearly 6,000 passenger service employees at the bankrupt airline, said that 60 percent of members who cast ballots voted to approve the deal, which runs though 2011.

The deal is expected to save the airline $137 million a year.

“This ratification is very important to our future success, as it shows our ability to work collaboratively with our employees toward common goals and solutions. Today, we have drawn much closer to becoming a stronger, more competitive airline,” said Jerrold Glass, the airline’s senior vice president of employee relations.

Yesterday’s vote gives the airline ratified deals with two of its four major unions: the CWA and the pilots’ union. It still needs ratified deals from its flight attendants and its machinists’ union.

CWA leaders had urged approval of the deal. They said the pay cuts, while steep, are much less than the 34 percent cuts initially sought by the airline.

The contract cuts the pay for most CWA employees by 13 percent, with top scale now at $18 an hour. Employees would not receive pay raises until at least 2008.

The new contract also cuts benefits and changes work rules. It also implements a profit sharing program, but US Airways has estimated that it will be at least 2008 before the carrier could turn any kind of substantial profit, even if it receives all the concessions it seeks.

US Airways Group Inc. has said it needs sharply lower labor costs immediately, or it likely will begin liquidation by mid-January. That’s when its interim financing agreement with the federal government’s Air Transportation Stabilization Board is set to expire.

The airline had asked a bankruptcy judge to cancel the collective-bargaining agreements with the CWA, the Association of Flight Attendants and the International Association of Machinists and Aerospace Workers if those unions don’t reach voluntary agreements with the airline.

The pilots’ union and the smaller Transport Workers’ Union had already ratified new deals.

The flight attendants have reached a tentative agreement on a new deal, but union leadership is taking a neutral stance and is not recommending approval. The proposed contract would impose pay cuts of about 9 percent on the union’s 5,200 members, and save the airline $94 million a year. The results of their ratification vote will be announced Jan. 5.

Negotiations with the machinists are continuing, but no deal has been reached. The union has said if it doesn’t reach a deal, it will submit management’s final offer to membership for a vote before U.S. Bankruptcy Judge Stephen Mitchell rules on the airline’s request to cancel the contracts.

Judge Mitchell is expected to issue his ruling on Jan. 6 or 7.

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