US Airways, pilots reach tentative accord

$465 million a year in pay and benefits would be cut

July 09, 2002|By NEW YORK TIMES NEWS SERVICE

US Airways and its pilots union have reached a tentative agreement that would cut $465 million a year from the pilots' wages and benefits, the airline and the union said yesterday.

The agreement was reached Wednesday but not made public until yesterday, when it appeared that the two sides were likely to iron out a few remaining issues, union spokesman Roy Freundlich said.

Although agreement was reached to cut $465 million a year over 6 1/2 years, the proposed deal will not be sent to the union's membership for approval, he said, until negotiators work out provisions related to job security and other compensation, such as stock options.

"The $465 million represents a tremendous contribution by the pilots," said Freundlich, whose union represents 4,800 workers. "We're the largest participants in their restructuring plan by far."

The savings from the pilots are a critical element of the carrier's restructuring plan. US Airways has submitted the plan, which calls for reducing labor costs by $950 million a year, as part of an application for a $900 million federal loan guarantee.

An agreement with the pilots and other unions would presumably be offered as evidence that US Airways is trying to become profitable and will have a chance of repaying a $1 billion loan it wants to obtain.

The airline, hit hard by the terrorist attacks of Sept. 11, reported a loss of $269 million for the past quarter and $2 billion for last year.

"We need the cooperation and participation of all of our employee groups, and we continue to negotiate with those with whom we want to reach an agreement," Christopher L. Chiames, senior vice president for corporate affairs, said yesterday.

The carrier had originally asked the pilots for $595 million in annual cuts over 7 1/2 years.

The pilots also have agreed to let US Airways increase its number of regional jets to 465. The smaller planes, which are cheaper to operate than longer-range aircraft, are considered crucial to the restructuring plan because they can be used in flying new routes.

In return, the airline's regional jet subsidiaries will hire some of the 1,070 pilots on furlough, Freundlich said.

Last week, the flight attendants union reached a tentative agreement to cut $77 million a year in costs through 2008.

Yesterday, the Machinists union said it was in talks with the carrier. "Our negotiators do not feel that any type of agreement is imminent," said spokesman Joe Tiber.

US Airways initially asked the union for $261 million in annual cuts.

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