It doesn''t end!


Dec 21, 2002
US Airways Cuts Employee Pay 5 Percent
Saturday March 29, 6:42 pm ET
By Jonathan Stempel

NEW YORK (Reuters) - US Airways Group Inc. (OTC BB:UAWGQ.OB - News), which is expected on Monday to exit Chapter 11 bankruptcy protection, has told employees it will immediately cut wages 5 percent across the board because the Iraq war has caused bookings to fall.

The cuts will take effect on Monday or Tuesday, depending on the start of the affected employees'' pay period, the No. 7 U.S. carrier said. U.S. Airways will restore the cuts after its first profitable quarter or 18 months, whichever comes first, but not necessarily if war ends.

US Airways, which is based in
Arlington, Virginia, announced its wage deferrals in a voice-mail message on Friday from Chief Executive David Siegel. An airline spokeswoman said a letter from Siegel is being sent this weekend to all of US Airways'' employees, who numbered 37,100 at the end of 2002.

As the war in Iraq has entered its second week, we''re seeing the impact on new bookings which continue to be down significant double digits from what would have otherwise been expected, Siegel said in the voice message, monitored by Reuters. While our reorganization provides for a much brighter future, US Airways is still in a very fragile state.

The carrier said it negotiated the right to impose the wage deferrals in December.

We know this is an additional sacrifice, but these are extraordinary circumstances, Siegel said in his letter, contents of which was provided by the airline. Like many other carriers, we face survival challenges related to the dramatic reduction in travel, the rise in fuel costs and other effects on our operations and the economy from the war.

A spokeswoman for the airline, Deborah Thompson, said: The company will continue to take a look at the situation and modify the deferral if possible.

On Thursday, US Airways said it will cut about 4 percent of its flights, less than several rivals, because bookings are down. It is not for now reducing its aircraft fleet size.

No. 2 U.S. carrier United Airlines Inc., a unit of UAL Corp. (NYSE:UAL - News), and No. 12 carrier Hawaiian Airlines Inc., a unit of Hawaiian Holdings Inc. (AMEX:HA - News), are in Chapter 11.

People familiar with the matter said AMR Corp.''s (NYSE:AMR - News) American Airlines Inc. may follow as soon as the week of March 30-April 5.