700UW said: "The AFA asks was $116 Million, they made $94 Million who is that more then the ask? And IAM-FSA will NOT go over ask.
The Pittsburgh Post-Gazette reported: US Airways and the flight attendants union have reached an agreement on $94 million in annual costs cuts over the next five years. The $94 million agreement includes pay and benefit cuts but does not address the company's requests to eliminate the flight attendants' pension plan and cut retiree health care coverage. Those requests, worth another $63 million a year, will be dealt with by U.S. Bankruptcy Court Judge Stephen Mitchell, who is overseeing US Airways' case.
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The Charlotte Observer reproted: The federal agency that regulates the nation's pension-insurance system said in a court filing that it does not object to the airline's terminating its pension plans. After reviewing the company's finances, experts with the Pension Benefit Guaranty Corp. concluded that "it is clear that US Airways' financial condition is dire" and that the airline may meet the requirements for turning over its plans to the agency.
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USA320Pilot comments: US Airways originally asked the AFA for a concession of $116 million, but then management increased the F/A "ask" after labor resistance and the CWA and AFA "self help" press release to $157 million, which equals the $94 million concession plus $63 million for elimination of retiree health care and DB pension plans. The press releases have caused more passengers to book away from the airline causing a further reduction in revenue, thus costs must be cut further to balance the equation, per the key creditors.
Yesterday, the Wall Street Journal confirmed what I have been saying that the creditor's are demanding additional cost cuts. The Journal noted US Airways says the latest GE deal, which includes lots of deadlines and financial hurdles, is a "catalyst" toward completing its restructuring. But it also
requires the airline to come up with another $100 million in liquidity by January. "It shows momentum and it's a vote of confidence from our largest creditor," spokesman Chris Chiames said.
Thus, without the additional cuts the terms of the GE deal would be violated and US Airways may not receive the $140 million in bridge financing deferral of aircraft debt and lease payments due over six months, which could cause the carrier to default on ATSB loan guarantee covenants.
There is reason to believe that after the AFA NC learned the PBGC would not object to DB Plan termination and the plan would be taken over by the government, the negotiators came up with the idea of agreeing to the company's cost cuts and permitting the court to "impose" retiree health care and retirement cuts. Why? Politics and the inability to make the hard choices. This is similar to what ALPA's RC4 did, by providing the pilot group with a TA greater than the comapny's original "ask".
Regardless, with "imposition" and the consensual part of the deal, the AFA will reach their cost cut target of $157 million per year for 5 years.
In regard to the IAM-FSA and IAM-Trainers, they too will likely provide concessions greater than the original ask. There are reports the IAM-FSA is making progress with the company, but it is widely expected the IAM-M will have "imposition" that could close one maintenance facility, eliminate all Utility positions, and have far greater "pain" with a concession more than the "ask", which was necessary. It's too bad this is happening, but here we are two days before the end of the S.1113© hearing with no apparent IAM-M counterproposal.
It's unfortunate, but it appears the IAM and its leaders are going to hurt their members more than any other US Airways union because they did not have the courage to make the difficult decisions. With each new labor accord, it makes it easier and easier for Judge Mitchell to abrogate a union contract to ensure the business enterprise survives.
Best regards,
USA320Pilot