Us Airways Asks Pilots For $300 Million In Cuts

javaboy

Senior
Dec 23, 2003
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US Airways asks pilots for $300 million in cuts

http://www.post-gazette.com/breaking/20040517usairp3.asp

Monday, May 17, 2004

By Dan Fitzpatrick, Pittsburgh Post-Gazette







US Airways officially asked its pilots today for $300 million in cost cuts, initiating a do-or-die negotiating process that will determine whether the money-losing airline can avoid filing for bankruptcy again.

The Arlington, Va.-based carrier did not break down the $300 million, except to say that the money could perhaps be saved through a combination of increased productivity, changes in how the pilots do their jobs and cuts in compensation and benefits. The pilots' reaction to the vague proposal was neutral yesterday, with union chairman Bill Pollock admitting that the pilots would have to sacrifice something for the company to turn itself around but stopping short of agreeing with the $300 million figure.

"We are certainly not excited about what is being discussed," he said, "but at the same time, we are not flailing around, screaming about it, either. We are at the point where this is what they say they need, and we will do our job to challenge every part of it to see whether we agree with them."

:shock:

using 3700 pilots that comes to 81,081.00 per pilot.

using 3700 pilots and 57.16 Million shares outstanding it would take 23172.00 per pilot to BUY THE ENTIRE COMPANY.

:blink:
 
javaboy,

I stuck this on the tail-end of the Code-a-phone update for the 14th thread, but this might be a more appropriate place for it.....

Jim

MEC CODE-A-PHONE UPDATE
May 17, 2004

This is Jack Stephan with a US Airways MEC update for Monday, May 17th, with one new item.

Today your Negotiating committee, staff, and advisors met in Crystal City to receive the Company’s Transformation Plan Pilot Cost Target. The Company is seeking cost reductions from the pilot group of $295 million dollars annually. They are pursuing a “Hybridâ€￾ network model that resembles the America West cost structure for its hub and spoke system and hybrid scheduling and the Jet Blue cost structure for its point to point operation.

All employee costs are being compared along five dimensions:

1. Seniority
2. Productivity
3. Rates of Pay
4. Benefits
5. Scope

The Negotiating committee will now review the Company’s presentation and analyze the costing model used to generate the requested cost reductions. The committee plans to meet again with management later this week.

As always, refer to the code a phone and our web site in following these negotiations as we engage in the process of returning our airline to profitability.

Please remember we have 1,879 pilots on furlough.

Thank you for listening.
 
ok very good sorry to be redundant. i noticed the shift from the "composite carriers" cost comparrision to Delta, to SWA to LCCs to now Jetblue. intresting with only one airline left with lower costs Yes lower costs (air tran).

it would be intresting to note how close pay rates are between JB and UAIR.

my guess is mgmt is comparing JB employees (most of which are less than 2 years with the company) the most senior (founding employees) are 4 years.
with UAIR Top of scale (12 year plus...which of course is furloughed) so take a look at TOS pay for JB vs TOS pay for UAIR i'm guessing the disparity isnt nearly what people think. as for the rest, nothing in the current nor previous contracts prevents the company from scheduling 6.15 hr average workdays (jb current average flight time...done so in less than 11hrs duty) Thus if you could fly 85hrs hard time and do so at an average of 6.15 per day you complete the month in 14 days. My guess is the company would view that as an opportunity to reduce the head count when the correct answer is to use the addtional pilots to fly more anywhere anytime which would keep pilot payroll the same in headcount and take home but reduce CSMs below 9cents by increasing ASMs dramatically. the gates are already paid for, the jets are already leased, the agents ramp, gate and other are already at the airports staffed, the maintence facilities are in place, except for fuel burn there is literally no addtional costs to create more product which reduces your cost for producing all of the product.

<_<
 
javaboy,

No, you weren't redundant at all. And I agree with everything you said. It'll be interesting to see if the company really wants the AWA contract, or if they just want to pick and choose some parts of it. I understand it has some time-and-a-half and double-time provisions.

Jim
 
javaboy said:
Using 3700 pilots and 57.16 Million shares outstanding it would take 23172.00 per pilot to BUY THE ENTIRE COMPANY.
Our pilots did this at UAL, what a wonderful thing it is to have the fox in charge of the hen house. Our employees did a great job don't you think?? Hah!!! Find another way to do it. Remember the old saying......If it flys, floats or f---s........Rent it. You don't want to own the airline.
 
just pointing out a cheaper alternative thats all.

or as viewed another way,

for the 300million in addtion to the hundreds of millions previously given up one would expect a higher % ownership.... considering how much Bronner put in and got how much 35 % vs how much pilots put in and got what 17%? yet the pilot group put in 4 times as much cash as the alabama folks?

heck take the money and HIRE a professional team to run the place, once turned around, you can then sell a portion of your equity stake to recover your contributions (thus recover your pay cut in a lump sum type deal at 0 cost to the company)

another way of looking at the problem (getting cuts short term yet some how setting up a recovery plan or snapback without raising costs at a future date such that your back in the same place with costs again)