- The Washington Times - Tuesday, November 8, 2005

Flyi Inc. yesterday reached tentative agreements on wage cuts and work rule changes with two of its unions at its low-cost carrier Independence Air, one day after filing for Chapter 11 bankruptcy protection.

Agreements with the Association of Flight Attendants and Aircraft Mechanics Fraternal Association must be ratified by workers.

Neither the company nor the unions divulged terms of their agreements.

Mechanics union representative Marc Gendron said his union’s tentative contract would satisfy the airline’s short-term needs and the long-term needs of the union, which has about 200 members.

“Personally I think it’s a really good deal for the guys,” Mr. Gendron said. “Our negotiating team wouldn’t put it out there if we didn’t think it was appropriate.”

The proposed contract is a 4-year deal. The mechanics union has been negotiating with the airline since June 2002 under supervision of the National Mediation Board.

Mr. Gendron said the union should complete voting within 30 days.

The agreement will help the airline restructure, said Kenneth Kindred, president of the Association of Flight Attendants-Communications Workers of America Master Executive Council.

Ballots will be mailed to Independence Air’s estimated 500 flight attendants today and counted Nov. 28.

Membership meetings will be held today and tomorrow to discuss the terms.

If the unions don’t agree to negotiated wage cuts, the airline could simply ask the U.S. Bankruptcy Judge Mary F. Walrath to void the contracts, allowing the airline to unilaterally impose wage rates and change work rules.

Flyi Inc. filed for Chapter 11 protection from creditors on Monday in U.S. Bankruptcy Court in Delaware listing assets of $378.5 million and debts of $455.4 million. The company has $24 million in cash.

Mr. Gendron said the union is aware Independence Air could shut down if no bidders participate in the court-supervised auction the company has asked the court to allow.

But mechanics remain hopeful.

“We really feel this place can make it. Whether it does or not is beyond our control,” Mr. Gendron said.

Flyi’s bankruptcy came just 17 months after the airline reinvented itself as a low-cost carrier under the name Independence Air. The airline had been known as Atlantic Coast Airlines and began flying in December 1989 as a regional carrier for United Airlines. It severed ties with United in April 2004.

Company executives agreed to take wage cuts. Chairman and Chief Executive Officer Kerry Skeen will take a 25 percent pay cut. President and Chief Operating Officer Tom Moore will take a 20 percent wage cut.

Management and other salaried workers are subject to an immediate 5 percent pay cut.

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