Posted on: Friday, December 20, 2002
US Airways ready to file blueprint for recovery
By Barbara De Lollis
USA Today
US Airways said yesterday that it would proceed with plans to file its reorganization blueprint with a bankruptcy court today, even though it has not managed to win critical concessions from at least two key unions.
The struggling carrier will continue talks with mechanics, baggage handlers and flight attendants, said US Airways spokesman David Castelveter.
The carrier has until Jan. 31 to present its plan. But airline officials vowed to file by today to meet a goal of emerging from bankruptcy by March and to secure the rest of the $740 million in financing from Alabama pension fund Retirement Systems of Alabama.
US Airways can amend today's filing before creditors vote on it, but the company faces risks by filing without having won vital concessions from key unions.
The Alabama fund is to own 36 percent of the airline after it emerges from bankruptcy. Retirement Systems CEO David Bronner has warned that US Airways might have to be liquidated if its unions don't agree to cuts. He declined comment yesterday.
The airline's 32,000 employees agreed earlier this year to annual wage and benefits cuts of $850 million as part of cost cutting aimed at eliminating $1.2 billion in expenses a year. US Airways later said continued weakness in the industry required it to seek an additional $200 million from its unions, mainly through work rules changes that could mean fewer jobs.
Last week, the carrier's pilots agreed to $101 million more in annual concessions, on top of $465 million in earlier givebacks. Gate workers, reservations agents and other passenger service workers have agreed to more cuts.
Flight attendant union leaders say they won't cut a deal until the airline reaches agreements with everyone else and management takes deeper cuts, which it did on Wednesday. Negotiators for the machinists union, representing mechanics and baggage handlers, have been talking to the airline since last week. Labor experts predict mechanics will be US Airways' biggest challenge, because their approval for the last round of concessions — worth $154 million a year — required a second vote.
