This is Roy Freundlich with a US Airways MEC update number two for Saturday, March 1.
The bankruptcy court hearing on the Company’s motion to distress terminate the pilots defined benefit plan reconvened today, and Judge Mitchell issued the following decisions:
The judge ruled in favor of the company’s motion that it has met the financial conditions under the Employment Retirement Income Security Act (ERISA) and approved the distress termination of the pilots’ defined benefit plan subject to the pilots’ collective bargaining agreement. The bankruptcy court’s decision does not automatically terminate the plan. The court’s ruling must now be processed by the PBGC.
In issuing his ruling the judge stated that the Company did not have the money itself to emerge from bankruptcy. US Airways requires from other parties DIP financing to operate in bankruptcy and exit financing to emerge from bankruptcy and had to satisfy lender conditions to receive financing. He also stated that US airways could not pay its debt without pension plan termination.
The judge ruled in favor of ALPA’s objection to the Company’s proposed order that the court should determine if plan termination was in violation of our pilots’ collective bargaining agreement, which the Company claims it is not. The judge determined that the bankruptcy court is not the proper forum to decide this labor contract issue and declined to make a finding. This decision preserves our collective bargaining rights under the Railway Labor Act and allows the contract violation issue to be settled under the grievance process. Recall that ALPA filed a grievance on February 5, 2003, against the Company’s actions on this issue.
The PBGC cannot complete a pension plan distress termination until the contractual dispute is resolved.
The judge also authorized the debtor, US Airways, to negotiate a defined contribution plan as committed to in the December 13, 2002, letter concerning the follow on pension funding commitment to pilots.
Needless to say, your MEC representatives are very disappointed in the judge’s ruling on the distress termination issue, but was gratified that the judge ruled in favor of ALPA’s position that the contract violation issue be resolved under the grievance provisions of the Railway Labor Act.
The MEC and ALPA’s legal counsel are reviewing ALPA’s legal options and other contingency requirements.
Please remember we have 1827 pilots on furlough.
Thank you for listening.


A company cannot unilaterally change all or a portion of a contract and it appears ALPA has a very strong case for arbitration.



Feb 17, 2003
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On 3/1/2003 9:41:25 PM chipmunn wrote:

A company cannot unilaterally change all or a portion of a contract and it appears ALPA has a very strong case for arbitration.



All the legal wrangling in the world will not change the fact that this company needs to reduce all non-essential costs to stay in business, and the pilot pension prior to today was "too rich" for current airline economic conditions. The following e-mail was sent to your buddy Roy Freundlich this evening. I hope the pilots understand what they have to sacrifice to keep this company operating.


Be very careful what direction you take the ALPA pension issue. There are many US Airways employees who are fed up with the rhetoric from ALPA, and we all
want to keep the company operating. At this point, the payments to Steve, Rakesh, and Larry are not important, nor are they any of your business. Do not
pursue this angle, because if the shoe were on the other foot, I guarantee you that you would not want that to happen. Be smart. Let the pilots take their
cuts because god knows their pension was way too rich for the current industry economics. I know you're a smart man, and I know you don't want to lose your
salary which is paid by union dues by letting the pilots pi** away the company to Chapter 7, so do the right thing. If you don't, all of the non-Alpa employees will be beating your door down and you will
forever have to live with your inability to keep the doors open at US. It is up to you to sell the pilots on the ultimate decision to accept the cards they have been dealt, or convince them to quit and find another
airline that will give them the pension they had before today at US. I guarantee they will not it find at ANY carrier for the foreseeable future. I'm just a concerned citizen and I know you are not stupid enough to let the pilots close the doors.

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