USAir directors to weigh pact with pilots union

April 01, 1995|By Suzanne Wooton | Suzanne Wooton,Sun Staff Writer

The directors of USAir Group Inc. are due to consider next week an agreement with the airline's pilots union that, if approved, would be the first formal step toward implementing a crucial cost-cutting plan.

The meeting, scheduled for Wednesday at the company's Arlington, Va., headquarters, could lead to the board's ratifying an agreement, initially reached last weekend between union and company negotiators that would save the company $190 million a year for five years.

Union leaders continued to rework the pact in a series of meetings this week. In its current form, the agreement would cut 22 percent from the pilots' pay and allow up to 300 of them to be furloughed over the next two years.

The tentative deal is part of the beleaguered company's efforts to obtain $2.5 billion in wage, work rule and benefit concessions over the next five years from its 45,000 employees.

The agreement with the pilots remains contingent on concessions from other employees. Ultimately, all of the pilots will vote on the agreement if the pilots' executive council and the airline's board approve it and USAir strikes a deal with its other employees.

USAir said yesterday that it was continuing to negotiate with representatives of its other unions.

Further, because of its continuing talks with labor, USAir said it wouldn't file its annual 10K financial statement with the Securities and Exchange Commission by this week's deadline. The company said it expected the outcome of the labor talks to bTC "materially affect" the disclosures, which the airline must make in the annual filing.

The pilots' agreement, which was the first pact reached with any of its four unions, was outlined in a letter yesterday to the union's 5,200 members.

Under the terms described in the mailing, pilots would take a 22 percent pay cut, based on their July 1995 salaries, and forgo a scheduled 1 percent pay raise in January 1996. The agreement calls for work rule concessions -- such as no extra pay for flying at night -- and cuts in meal expenses, vacation accrual and moving expenses. The airline would be permitted to furlough 250 pilots this year and 50 more in 1996. Currently, 300 USAir pilots are on furlough.

In return, pilots and other employees would receive a 20 percent equity stake in USAir through an employee stock ownership plan. A new series of preferred stock with a face value of $400 million would be placed in an employee trust.

USAir employees also would receive four seats on the airline's 16-member board of directors, with one each going to the pilots, the machinists, flight attendants and nonunion employees. A two-thirds majority would be required to pass any decision by the new board.

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