US Airways attendants reach accord on $94 million in cuts

Pact is subject to vote by 5,200 union members

December 17, 2004|By BLOOMBERG NEWS

US Airways Group Inc. reached a tentative agreement with its flight attendants union yesterday to cut $94 million in pay and benefits to help the carrier avoid liquidation.

The accord is subject to a review by the Association of Flight Attendants' master council and a vote by the 5,200 workers, the company and the union said in statements. Neither side would provide details. US Airways has ratified or has pending agreements with all but one of its unions.

US Airways, operating in bankruptcy protection, had sought $156 million in cuts from current and retired attendants under a plan to reduce labor expenses by $950 million a year.

The airline is reducing annual expenses by $1.5 billion to compete with low-cost rivals and avoid liquidation.

"With this agreement, we are much closer to becoming a stronger and more competitive airline," said N. Bruce Ashby, a US Airways senior vice president.

The accord leaves only the Machinists union, which represents mechanics and baggage handlers, without a pending or approved agreement with the airline. The seventh-largest U.S. carrier, which has its headquarters in Arlington, Va., said it must have the union concessions to avoid liquidation and leave bankruptcy.

Talks with the Machinists are continuing, US Airways said.

US Airways' flight attendants had voted Monday to strike should the court scrap their contract.

The airline won bankruptcy court permission Oct. 15 to cut wages 21 percent and reduce other benefits for four months to provide cash for the airline to operate through the winter travel season. It sought authority for the permanent cuts when it wasn't able to negotiate concessions with the unions.

The court in October approved agreements with US Airways pilots for $1.85 billion in concessions over five years and with three groups represented by the Transport Workers Union for $8 million in annual savings. The customer-service and reservations agents are voting on $137 million a year in savings.

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