US Airways pilots agree to permanent concessions

Union accepts millions in cuts to wages, benefits

October 22, 2004|By NEW YORK TIMES NEWS SERVICE

Pilots at US Airways have voted in favor of giving $300 million in annual wage and benefit concessions to the struggling airline, becoming the first major labor group to accept permanent cuts, the union representing pilots said yesterday.

US Airways made its second bankruptcy protection filing in two years on Sept. 12. Last week, a U.S. Bankruptcy Court in Alexandria, Va., granted the airline's bid for emergency pay cuts of 21 percent, and other benefit reductions, for its union workers. Without the cuts, US Airways said, it could cease operating by mid-February.

Pilots at other airlines are facing similar efforts to reduce pay and benefits. Delta Air Lines, which is trying to avoid joining US Airways in reorganization, is pushing its pilots for $1 billion in wage and benefit cuts.

United Airlines, which has been in bankruptcy protection since December 2002, said last week that it would soon outline plans to nullify its labor contracts and replace them with less-expensive pacts. Last year, United's parent, the UAL Corp., obtained concessions worth $2.5 billion a year from its unions.

US Airways pilots voted 58 percent in favor of the contract, a wider margin than some analysts had expected. The vote means members of the Air Line Pilots Association, which represents 3,200 active and laid-off US Airways pilots, are exempt from the emergency cuts.

Instead, their pay will be cut 18 percent a year, a total of $1.8 billion in savings for the airline through 2010. The new contract will also sharply reduce US Airways' contribution to the pilots' retirement plan, eliminate health care benefits for pilots after they retire, and increase the number of hours that pilots must fly each month.

Approval came despite the rejection of the contract by pilots in Pittsburgh and Philadelphia, two of US Airways' three hubs, the other being Charlotte, N.C.

In both Pittsburgh and Philadelphia, 52 percent of the pilots voted against the contract. Leaders of those pilots had blocked an effort to send an earlier proposal to a vote.

They were especially angered by the reduction in retirement benefits, which had already been cut sharply in the airline's first bankruptcy filing.

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