Airline makes final bid to pilots
ARLINGTON, Va. - US Airways Group Inc. made a last-ditch offer to its divided pilots' union Friday for a new labor contract as the beleaguered airline tries to avoid a second bankruptcy filing that may be just days away.
The offer came as the pilots met Friday afternoon in Pittsburgh - a meeting scheduled before US Airways made its latest offer - at the request of the hard-line union representatives from Pittsburgh and Philadelphia who refused to send an earlier company proposal to the union's 3,000 members for a vote.
The pilots' union discussed the company's new proposal at Friday's meeting, but it was not immediately clear what, if any, action would be taken, said pilots' union spokesman Jack Stephan.
US Airways chief executive Bruce Lakefield said Friday that the company has made new offers to both the pilots and flight attendants.
The most recent offer, Lakefield said, was designed to cut pay as little as possible by requiring pilots and flight attendants to fly more hours and make other work-rule changes.
A necessary consequence of that would be additional furloughs. Almost 1,900 pilots are already on furlough, according to the union.
Lakefield said he has received e-mails and correspondences from hundreds of pilots saying they support "a balanced approach" to a new labor contract.
"It is for that reason that we made the proposals that we did today," Lakefield said in a recorded message to employees.
Stephan said the new offer at first glance "looks very similar to their (the company's) original proposal back in June." Sources familiar with the negotiations said the new proposal still sought the same $295 million in annual concessions as previous proposals, but made the cuts in different ways.
The airline has warned that a bankruptcy filing as soon as mid-September is possible. Some insiders have speculated a filing may come as early as Sunday.
On Monday, the pilots' union rejected a proposal that would have called for a 20 percent pay cut and a 50 percent cut in retirement-plan contributions that also would have saved the airline $295 million a year, according to sources familiar with the negotiations.
The moderate chairman of the pilots' Master Executive Council, Bill Pollock, has criticized the Pennsylvania representatives for blocking a vote on the management's proposal.
The airline had hoped that a deal with the pilots would create momentum for new contracts with its other unions, including the flight attendants and the gate workers and reservations agents represented by the Communications Workers of America.
Only one of the airline's unions, the International Association of Machinists, has refused to discuss a revised labor contract.
In all, the airline says it needs $800 million in annual cost cuts from its labor unions as part of a plan to cut costs by $1.5 billion a year.
Despite the looming threat of bankruptcy, negotiations have been particularly difficult because the unions agreed to more than $1 billion a year in concessions just two years ago, during the company's first trip into bankruptcy.
US Airways spokesman David Castelveter declined to comment on whether a last-minute deal with the pilots would affect the company's potential need to file for bankruptcy.
David LeMay, a bankruptcy partner at the New York-based law firm of Chadbourne and Parke, said that if the company felt it was making real progress in its negotiations, US Airways might hold off on a bankruptcy filing. Otherwise, it will want to conserve its cash to pay for a bankruptcy restructuring.
In particular, the company might be unwilling to make a $110 million pension payment due Wednesday if it saw little hope of achieving deals with its unions, LeMay said.
"They're clearly getting down to the wire," he said. "My guess would be that if they made real progress it would enable them or make them more willing to spend money they might otherwise" want to conserve.
Shares of US Airways fell 29 cents, or 17 percent, to $1.46 in trading Friday on the Nasdaq Stock Market.