USAir, pilots union to resume talks on cost-cutting

November 15, 1994|By Bloomberg Business News

WASHINGTON -- USAir and its pilots' union yesterday agreed to resume talks over how much union workers should contribute to the carrier's cost-cutting efforts. They set a deadline of 30 days for reaching an agreement.

After two weeks of preliminary talks, the unit of Arlington-based USAir Group Inc. said "an agreement on a framework for resuming negotiations has been reached."

The talks that brought the two sides back to the table were brokered by a special mediator, former Virginia Gov. Gerald Baliles. Now a partner in a Virginia law firm, Mr. Baliles last year chaired a blue-ribbon commission on the U.S. airline industry. He met with officials at the U.S. Department of Transportation yesterday and briefed them.

"Under this agreement, the parties have committed to reaching a contract within a 30-day time frame," USAir said in a release.

Negotiations will resume Nov. 16 in Washington under Mr. Baliles' guidance.

"We're pleased to resume negotiations and get down to the business of creating the environment for this company to return to profitability," said Seth Schofield, chairman and CEO of USAir Group.

USAir is the largest airline operating at Baltimore-Washington International Airport.

The pilots also said they're ready to resume talks.

"We are pleased that the parties will return to the table," said Peter Gauthier, chairman of the USAir Master Executive Council of the Air Line Pilots Association. "Despite recent negative publicity, this company has a great future and we intend to protect it."

The Air Line Pilots Association broke off cost-cutting talks in October, after USAir said it would sell some larger aircraft, particularly Boeing 767s. When it sells off the big jets, USAir plans to pare down the number of pilot jobs through attrition and send many captains to lower-paying positions on smaller planes.

Pilots said USAir's move to cut jobs in the middle of the talks was a sign of bad faith. An agreement with the pilots is considered a crucial first step toward a broader agreement with the other unions at USAir: the Association of Flight Attendants, the International Association of Machinists and the Transport Workers Union.

USAir says it needs a $500 million reduction in its annual labor costs to compete with low-cost carriers along the Eastern Seaboard.

Disagreements involve how the cuts will be achieved -- the mix of wage and benefit reductions and work rule changes -- and on how much of an ownership stake the union workers would get in return.

USAir has lost more than $1.6 billion over the last six years. Recently, it reported a wider-than-expected net loss in the third quarter of $180.1 million.

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