USAir pilots approve contract Pact allows carrier to spin off new low-fare operation

Airlines

November 01, 1997|By Suzanne Wooton | Suzanne Wooton,SUN STAFF Bloomberg News contributed to this article.

US Airways pilots have overwhelmingly approved a five-year contract that will allow the airline to launch a low-fare operation to compete with discount carriers such as Southwest Airlines and Delta Express.

A count of mail-in ballots yesterday showed that 88 percent of the airline's 4,600 pilots returned ballots and 84 percent voted in favor of the agreement.

After 17 months of sometimes contentious talks, the company and the pilots' negotiating committee reached a tentative deal Sept. 30, subject to approval by the union's rank and file.

Both the company and pilot leaders issued statements yesterday praising the favorable vote.

"This is a major victory for pilots as well as for US Airways," said Jon Bryan, chairman of the US Airways pilots' Master Executive Council. "We're proud that this agreement includes the first contractually guaranteed growth provisions ever achieved in the airline industry."

US Airways Chief Executive Stephen M. Wolf said the pilots had taken a major step along the path to becoming a world-class airline.

The vote prompted US Airways shares to rise $1 to $46.875 on the New York Stock Exchange. Analysts praised the vote, which exceeded American Airline pilots' 70 percent support last year for their their contract.

"This contract puts US Airways on the offensive, rather than the defensive," said Glenn Engel, an airline analyst for Goldman Sachs.

In addition to guaranteed growth for the airline, the contract assures early retirement for 325 pilots with seniority, a recall of 386 furloughed pilots and bringing US Airways' cost structure in line with other major airlines.

Based in Arlington, Va., the airline, handles about 45 percent of the daily passengers at Baltimore-Washington International Airport. It also will be able to devote 23 percent of US Airways' service to a new discount division, known as US2.

jTC The company has repeatedly said that BWI, a relatively uncrowded airport, would be pivotal to such an operation.

Pilots will be assigned to the low-fare operation based on seniority. Those selected will take a 24 percent pay cut. The company said it could offset much of those cuts with increased flying hours and greater opportunities for promotions for pilots in the new division.

The two sides reached tentative agreement hours before a deadline for the carrier to affirm its $14 billion contract to buy 120 jets from Airbus Industrie, the European aircraft manufacturer, with an option for 280 more planes. The airline has since arranged for the delivery of 30 of those planes by 2000.

Pub Date: 11/01/97

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