- The Washington Times - Wednesday, September 1, 2004

The union representing pilots for US Airways is anticipating a tentative agreement, perhaps as soon as today, in negotiations to help the airline avoid another bankruptcy.

“It is possible,” said Jack Stephan, a spokesman for the Air Line Pilots Association (ALPA). “We’re not commenting on the specifics of the proposal.”

US Airways is asking for $295 million in labor-contract concessions from its pilots.

ALPA yesterday urged the pilots to attend a negotiating meeting today at a hotel in Arlington, because “this meeting could very well be the discussion of a tentative agreement or a final proposal,” the union told its members.

Management and the pilots union have been negotiating this week after nearly giving up in frustration last week. The final disputed issues center on pension benefits.

The airline is trying to cut labor costs from its other employees by a half-billion dollars, which would include concessions from its mechanics and flight attendants.

Meanwhile, US Airways tried to reassure its frequent fliers yesterday that their “dividend miles” will be honored, regardless of the outcome of labor negotiations.

“These efforts in no way affect customers’ ability to earn or redeem dividend miles,” said Ben Baldanza, US Airways’ vice president of marketing and planning, in an e-mail message to customers.

He also said, “We remain focused on successful negotiations with our labor groups.”

Options for US Airways are running out as airline officials admit that they might file for bankruptcy as soon as this month. They said they want labor negotiations completed by Sept. 15.

The company’s chairman, David Bronner, has said the carrier is likely to liquidate if forced into another bankruptcy. The airline emerged from bankruptcy in April 2003.

US Airways is trying to reduce its costs by $1.5 billion per year as part of its “transformation plan,” with $800 million of it coming from lower labor expenses among the airline’s 28,000 employees.

The transformation plan includes operating with a no-frills business template, which is being used by low-cost competitors who are eating away at US Airways’ market share.

An earlier proposal from US Airways asked pilots for a 16.5 percent pay cut, work rule changes and the possibility of more furloughs, adding to the nearly 1,900 pilots already on furlough.

Airline officials refused to comment on their more recent proposals.

On Tuesday, the airline’s mechanics union presented US Airways with a plan to reduce its expenses by $115 million without renegotiating its contract with the International Association of Machinists and Aerospace Workers.

“Labor costs are not the problem,” said Joe Tiberi, spokesman for the machinists union. “There is an operations problem at US Airways that needs to be addressed.”

US Airways stock closed down yesterday by 0.05 percent at $2.1 per share on the Nasdaq Stock Exchange.

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