Shaky US Airways makes 11th-hour offer to pilots
Union appears to reject deal with counteroffer that was refused before
MATTHEW BARAKAT
Associated Press
US Airways asked its pilots to fly more hours without a pay raise in a last-minute effort Friday to settle a key labor dispute and head off a second bankruptcy filing.
But pilot leaders responded late Friday with a counteroffer that effectively rejected the airline's proposal. They agreed to send negotiators back to US Airways with a proposal the airline rejected last month.
The move appeared to limit prospects for a quick resolution.
"I'm disappointed for the pilots," said Mike Cross, chairman of the Charlotte local of the Air Line Pilots Association.
The pilots met Friday afternoon in Pittsburgh at a previously scheduled meeting called by union representatives from Pittsburgh and Philadelphia. Earlier this week, those same representatives refused to send a previous company proposal to the union's 3,000 members for a vote.
The pilots' union discussed the company's new proposal at Friday's meeting.
US Airways chief executive Bruce Lakefield said Friday that the company has made new offers to both the pilots and flight attendants. It also talked with the International Association of Machinists, which represents mechanics and fleet service workers, about union cost-savings ideas.
The most recent offers, Lakefield said, were designed to cut pay as little as possible by requiring pilots and flight attendants to fly more hours and make other work-rule changes.
A necessary consequence of that would be additional furloughs. Almost 1,900 pilots are already on furlough, according to the union.
Lakefield said he has received e-mails and correspondence from hundreds of pilots saying they support "a balanced approach" to a new labor contract.
"It is for that reason that we made the proposals that we did today," Lakefield said in a recorded message to employees.
One pilot separately called it a "grass-roots" effort by pilots to save their jobs.
"The majority of us would rather take less and stay and make the company work, rather than have to go and find another job," Capt. Thomas McGuirk, a 20-year US Airways pilot based in New York, said in an interview, adding he had seen some of the e-mails but didn't write one himself.
Specifics of the offer were not released, but pilots' union spokesman Jack Stephan said at first glance it "looks very similar to their original proposal back in June." That proposal sought $295 million in annual concessions. Previous management offers had also included pay cuts of as much as 30 percent.
US Airways has warned for some time that a bankruptcy filing as soon as mid-September is possible. Some insiders have speculated a filing may come as early as Sunday.
Those concerns were shared by investors Friday, who sent the airline's stock down 29 cents, or 17 percent, to $1.46 on the Nasdaq Stock Market.
US Airways spokesman David Castelveter declined comment on whether a last-minute deal with the pilots would affect the company's potential need to file for bankruptcy.
In all, US Airways says it needs $800 million in annual cost cuts from its labor unions as part of a plan to cut costs by $1.5 billion a year.
Despite the looming threat of bankruptcy, negotiations have been particularly difficult because the unions agreed to more than $1 billion a year in concessions just two years ago, during the company's first trip into bankruptcy.
David LeMay, a bankruptcy partner at the New York-based law firm of Chadbourne and Parke, said that if the company felt it was making real progress in its negotiations, US Airways might hold off on a bankruptcy filing. Otherwise, it will want to conserve its cash to pay for a bankruptcy restructuring.
In particular, the company might be especially unwilling to make a $110 million pension payment due Wednesday if it saw little hope of achieving deals with its unions, LeMay said.
"They're clearly getting down to the wire," he said. "My guess would be that if they made real progress it would enable them or make them more willing to spend money they might otherwise" want to conserve.
The airline had hoped that a deal with the pilots would create momentum for new contracts with its other unions, including flight attendants and gate workers and reservations agents represented by the Communications Workers of America.
The pilots' union, however, is deeply divided and it could be difficult to reach a consensus. The chairman of the pilots' Master Executive Council, Bill Pollock, has criticized the union's Pennsylvania representatives for blocking the vote on management's proposal.
Union appears to reject deal with counteroffer that was refused before
MATTHEW BARAKAT
Associated Press
US Airways asked its pilots to fly more hours without a pay raise in a last-minute effort Friday to settle a key labor dispute and head off a second bankruptcy filing.
But pilot leaders responded late Friday with a counteroffer that effectively rejected the airline's proposal. They agreed to send negotiators back to US Airways with a proposal the airline rejected last month.
The move appeared to limit prospects for a quick resolution.
"I'm disappointed for the pilots," said Mike Cross, chairman of the Charlotte local of the Air Line Pilots Association.
The pilots met Friday afternoon in Pittsburgh at a previously scheduled meeting called by union representatives from Pittsburgh and Philadelphia. Earlier this week, those same representatives refused to send a previous company proposal to the union's 3,000 members for a vote.
The pilots' union discussed the company's new proposal at Friday's meeting.
US Airways chief executive Bruce Lakefield said Friday that the company has made new offers to both the pilots and flight attendants. It also talked with the International Association of Machinists, which represents mechanics and fleet service workers, about union cost-savings ideas.
The most recent offers, Lakefield said, were designed to cut pay as little as possible by requiring pilots and flight attendants to fly more hours and make other work-rule changes.
A necessary consequence of that would be additional furloughs. Almost 1,900 pilots are already on furlough, according to the union.
Lakefield said he has received e-mails and correspondence from hundreds of pilots saying they support "a balanced approach" to a new labor contract.
"It is for that reason that we made the proposals that we did today," Lakefield said in a recorded message to employees.
One pilot separately called it a "grass-roots" effort by pilots to save their jobs.
"The majority of us would rather take less and stay and make the company work, rather than have to go and find another job," Capt. Thomas McGuirk, a 20-year US Airways pilot based in New York, said in an interview, adding he had seen some of the e-mails but didn't write one himself.
Specifics of the offer were not released, but pilots' union spokesman Jack Stephan said at first glance it "looks very similar to their original proposal back in June." That proposal sought $295 million in annual concessions. Previous management offers had also included pay cuts of as much as 30 percent.
US Airways has warned for some time that a bankruptcy filing as soon as mid-September is possible. Some insiders have speculated a filing may come as early as Sunday.
Those concerns were shared by investors Friday, who sent the airline's stock down 29 cents, or 17 percent, to $1.46 on the Nasdaq Stock Market.
US Airways spokesman David Castelveter declined comment on whether a last-minute deal with the pilots would affect the company's potential need to file for bankruptcy.
In all, US Airways says it needs $800 million in annual cost cuts from its labor unions as part of a plan to cut costs by $1.5 billion a year.
Despite the looming threat of bankruptcy, negotiations have been particularly difficult because the unions agreed to more than $1 billion a year in concessions just two years ago, during the company's first trip into bankruptcy.
David LeMay, a bankruptcy partner at the New York-based law firm of Chadbourne and Parke, said that if the company felt it was making real progress in its negotiations, US Airways might hold off on a bankruptcy filing. Otherwise, it will want to conserve its cash to pay for a bankruptcy restructuring.
In particular, the company might be especially unwilling to make a $110 million pension payment due Wednesday if it saw little hope of achieving deals with its unions, LeMay said.
"They're clearly getting down to the wire," he said. "My guess would be that if they made real progress it would enable them or make them more willing to spend money they might otherwise" want to conserve.
The airline had hoped that a deal with the pilots would create momentum for new contracts with its other unions, including flight attendants and gate workers and reservations agents represented by the Communications Workers of America.
The pilots' union, however, is deeply divided and it could be difficult to reach a consensus. The chairman of the pilots' Master Executive Council, Bill Pollock, has criticized the union's Pennsylvania representatives for blocking the vote on management's proposal.
