MEC CODE-A-PHONE UPDATE - October 15, 2004
This is Jack Stephan with a US Airways MEC update for Friday, October 15th, with one new item.
Item 1. Today, Judge Stephen Mitchell ruled in favor of the Company’s 1113(e) motion, thereby imposing immediate interim contractual relief on those unions without a ratified agreement in place. In his ruling Judge Mitchell referred to US Airways as a “Ticking Fiscal Time Bomb†that absent this imposed relief would likely result in a meltdown of the company. The judge did modify the pay cut sought from 23 to 21% and reduced the duration of the relief from 6 to 4 months. The rest of the relief sought by the Company was virtually granted as is, including relief on the minimum number of aircraft, the 10% DC contribution rate and raising the pay cay to 95 hours.
As we told you last week, ALPA reached an agreement with the Company during the ratification process. If the agreement is ratified and signed by ALPA by October 22, 2004 then the effective date is the earlier of:
the date 1113(e) interim relief is granted by the bankruptcy judge, which is today, October 15, or the date of ratification and signature by ALPA’s President
That means if the TA is ratified, instead of the 21% pay cut granted by the court, ALPA would incur an 18% reduction as per the terms of the ratified TA.
If the TA is not ratified by the membership, then the interim relief, which includes a 21 percent pay cut, will be implemented and effective as of the date it was granted by the Court, which is today, October 15. The Company may implement a retroactive pay reduction to the earliest date above. The complete terms of Judge Stephen S. Mitchell’s ruling will be posted shortly on the US Airways pilots only homepage.
There has been some confusion among pilots regarding the differences between the 1113(e) and the 1113© process. It is important for pilots to know that if the TA is voted down, the 1113(e) provisions, including the 21% pay cut, will be imposed. Understand that the imposition of the 1113(e) provisions would not be the end of this process. We would then enter into 1113© discussions with the Company, which is a process that would establish long-term, permanent contract relief. According to our advisors, the long-term relief would likely contain provisions no better than the TA. And we have been clearly advised that the 1113© process could produce provisions that would be far worse.
Item 2. Yesterday, Judge Mitchell approved the extension of US Airways' financing agreement with the ATSB, which was scheduled to expire today, October 15. This new agreement, which will expire January 15, 2005, allows US Airways to continue using the cash collateral securing its ATSB loan. US Airways must also meet a number of conditions, including minimum weekly cash balances and spending limits.
Please remember we have 1,879 pilots on furlough.
Thank you for listening.
This is Jack Stephan with a US Airways MEC update for Friday, October 15th, with one new item.
Item 1. Today, Judge Stephen Mitchell ruled in favor of the Company’s 1113(e) motion, thereby imposing immediate interim contractual relief on those unions without a ratified agreement in place. In his ruling Judge Mitchell referred to US Airways as a “Ticking Fiscal Time Bomb†that absent this imposed relief would likely result in a meltdown of the company. The judge did modify the pay cut sought from 23 to 21% and reduced the duration of the relief from 6 to 4 months. The rest of the relief sought by the Company was virtually granted as is, including relief on the minimum number of aircraft, the 10% DC contribution rate and raising the pay cay to 95 hours.
As we told you last week, ALPA reached an agreement with the Company during the ratification process. If the agreement is ratified and signed by ALPA by October 22, 2004 then the effective date is the earlier of:
the date 1113(e) interim relief is granted by the bankruptcy judge, which is today, October 15, or the date of ratification and signature by ALPA’s President
That means if the TA is ratified, instead of the 21% pay cut granted by the court, ALPA would incur an 18% reduction as per the terms of the ratified TA.
If the TA is not ratified by the membership, then the interim relief, which includes a 21 percent pay cut, will be implemented and effective as of the date it was granted by the Court, which is today, October 15. The Company may implement a retroactive pay reduction to the earliest date above. The complete terms of Judge Stephen S. Mitchell’s ruling will be posted shortly on the US Airways pilots only homepage.
There has been some confusion among pilots regarding the differences between the 1113(e) and the 1113© process. It is important for pilots to know that if the TA is voted down, the 1113(e) provisions, including the 21% pay cut, will be imposed. Understand that the imposition of the 1113(e) provisions would not be the end of this process. We would then enter into 1113© discussions with the Company, which is a process that would establish long-term, permanent contract relief. According to our advisors, the long-term relief would likely contain provisions no better than the TA. And we have been clearly advised that the 1113© process could produce provisions that would be far worse.
Item 2. Yesterday, Judge Mitchell approved the extension of US Airways' financing agreement with the ATSB, which was scheduled to expire today, October 15. This new agreement, which will expire January 15, 2005, allows US Airways to continue using the cash collateral securing its ATSB loan. US Airways must also meet a number of conditions, including minimum weekly cash balances and spending limits.
Please remember we have 1,879 pilots on furlough.
Thank you for listening.
