Wsj "airlines Keep Fighting For Viability"

Wretched Wrench

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Apr 21, 2003
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Airlines Keep Fighting for Viability

Big U.S. Carriers Embark
On Still More Cost Cuts;

Pay and Pensions on Block

By SUSAN CAREY Staff Reporter of THE WALL STREET JOURNAL
November 8, 2004; Page A5

Despite three years of shrinking and cutting costs, most big U.S. airlines haven't returned to profitability. Indeed, industry conditions have worsened recently in the face of high fuel prices, airfares at 12-year lows, overcapacity and rapid expansion of discount carriers.
As the goal posts have moved, airlines have been forced again to embark on a frantic campaign to cut expenses. If unsuccessful, some airlines face bankruptcy, and a few may even stop operating in the months ahead. But to get the cuts, they face increased tension with their heavily unionized work forces, which bore the brunt of previous cuts and now are being asked to work longer hours, take reduced pay and, in some cases, lose their lucrative pensions.
Two airlines in bankruptcy-court protection, US Airways Group Inc. and United Airlines parent UAL Corp., are asking their workers for a second round of big pay and benefit reductions. United also confirmed last week that it intends to terminate its four underfunded pension plans to reduce cash outflows, pushing those liabilities on the Pension Benefit Guaranty Corp., the national pension insurer in the U.S.. And US Airways, which has said it is considering freezing or terminating two pension plans, is going after retiree medical benefits as well.
AMR Corp.'s American Airlines, which narrowly averted a bankruptcy filing last year, plans to lay off 1,100 workers -- probably more -- in the coming months to reduce costs. Delta Air Lines' pilots are voting on a new contract that would cut their pay by 32.5%, and the carrier plans to eliminate 7,000 jobs in hopes it can avoid a Chapter 11 filing.
Northwest Airlines pilots Friday approved a new, interim contract that cuts their pay by 15%. But that saving, amounting to $265 million a year for two years, is expected to be augmented later, after the carrier's other unions agree to givebacks. Northwest is seeking $950 million a year overall in labor-cost reductions.
"Regrettably, even though we all thought back in December 2002 that things could not get worse, United and the industry are now facing their most challenging times ever," wrote Peter Kain, United's vice president of labor relations, in a letter last week asking its mechanics union to cough up an additional $100 million of annual concessions through 2010. The proposed cuts to all the groups include pay reductions, fewer holidays and vacation days, changes to health and welfare benefits, new work rules and profit sharing should UAL achieve $10 million in pretax earnings annually.
After UAL filed for Chapter 11 in December 2002, its workers agreed to $2.5 billion of annual givebacks, a huge sacrifice that the company thought would be more than adequate to allow it to attract new financing and emerge from court protection. But UAL has been unable to right itself and attract financing, so now it is asking workers for an additional $725 million a year in cuts, not counting the $650 million a year UAL will save by terminating the pension plans and creating cheaper, follow-on plans.
US Airways workers provided $1 billion of costs savings after their employer first filed for Chapter 11 in August 2002, and the pilots' pension plan was terminated. But US Airways was forced to return to court protection two months ago, and now is seeking $650 million in further savings from three big unions, on top of $300 million a year already agreed to by its pilots. So urgent is the carrier's liquidity position that the bankruptcy judge hearing its case authorized emergency 21% pay cuts through Feb. 15 on the three holdout unions while US Airways seeks to negotiate with them on permanent savings.
The industry's troubles even are extending to some of the discount airlines. ATA Holdings Corp., parent of ATA Airlines, filed for bankruptcy-court protection last month despite winning concessions from its pilots and flight attendants.
Nevertheless, workers at some of the big airlines aren't buying into the need to open their pocketbooks again or agree to new terms that could mean the loss of their jobs. Members of the Association of Flight Attendants at United are now being asked to pony up $137.6 million a year in contract concessions and "hundreds of millions" through the termination of their pension plan, on top of $314 million a year in givebacks agreed after the bankruptcy filing. The demands are "disastrous" and are not "fair, equitable or necessary for a successful reorganization," said Greg Davidowitch, the union president, vowing to fight the company "at the bargaining table...and in court."
The Air Line Pilots Association at United called the proposed changes "dramatic." UAL seeks more than $191 million in extra savings from the pilots.
 
Wretched Wrench said:
Airlines Keep Fighting for Viability

Big U.S. Carriers Embark
On Still More Cost Cuts;

Pay and Pensions on Block

By SUSAN CAREY Staff Reporter of THE WALL STREET JOURNAL
November 8, 2004; Page A5

Despite three years of shrinking and cutting costs, most big U.S. airlines haven't returned to profitability. Indeed, industry conditions have worsened recently in the face of high fuel prices, airfares at 12-year lows, overcapacity and rapid expansion of discount carriers.
As the goal posts have moved, airlines have been forced again to embark on a frantic campaign to cut expenses. If unsuccessful, some airlines face bankruptcy, and a few may even stop operating in the months ahead. But to get the cuts, they face increased tension with their heavily unionized work forces, which bore the brunt of previous cuts and now are being asked to work longer hours, take reduced pay and, in some cases, lose their lucrative pensions.
Two airlines in bankruptcy-court protection, US Airways Group Inc. and United Airlines parent UAL Corp., are asking their workers for a second round of big pay and benefit reductions. United also confirmed last week that it intends to terminate its four underfunded pension plans to reduce cash outflows, pushing those liabilities on the Pension Benefit Guaranty Corp., the national pension insurer in the U.S.. And US Airways, which has said it is considering freezing or terminating two pension plans, is going after retiree medical benefits as well.
AMR Corp.'s American Airlines, which narrowly averted a bankruptcy filing last year, plans to lay off 1,100 workers -- probably more -- in the coming months to reduce costs. Delta Air Lines' pilots are voting on a new contract that would cut their pay by 32.5%, and the carrier plans to eliminate 7,000 jobs in hopes it can avoid a Chapter 11 filing.
Northwest Airlines pilots Friday approved a new, interim contract that cuts their pay by 15%. But that saving, amounting to $265 million a year for two years, is expected to be augmented later, after the carrier's other unions agree to givebacks. Northwest is seeking $950 million a year overall in labor-cost reductions.
"Regrettably, even though we all thought back in December 2002 that things could not get worse, United and the industry are now facing their most challenging times ever," wrote Peter Kain, United's vice president of labor relations, in a letter last week asking its mechanics union to cough up an additional $100 million of annual concessions through 2010. The proposed cuts to all the groups include pay reductions, fewer holidays and vacation days, changes to health and welfare benefits, new work rules and profit sharing should UAL achieve $10 million in pretax earnings annually.
After UAL filed for Chapter 11 in December 2002, its workers agreed to $2.5 billion of annual givebacks, a huge sacrifice that the company thought would be more than adequate to allow it to attract new financing and emerge from court protection. But UAL has been unable to right itself and attract financing, so now it is asking workers for an additional $725 million a year in cuts, not counting the $650 million a year UAL will save by terminating the pension plans and creating cheaper, follow-on plans.
US Airways workers provided $1 billion of costs savings after their employer first filed for Chapter 11 in August 2002, and the pilots' pension plan was terminated. But US Airways was forced to return to court protection two months ago, and now is seeking $650 million in further savings from three big unions, on top of $300 million a year already agreed to by its pilots. So urgent is the carrier's liquidity position that the bankruptcy judge hearing its case authorized emergency 21% pay cuts through Feb. 15 on the three holdout unions while US Airways seeks to negotiate with them on permanent savings.
The industry's troubles even are extending to some of the discount airlines. ATA Holdings Corp., parent of ATA Airlines, filed for bankruptcy-court protection last month despite winning concessions from its pilots and flight attendants.
Nevertheless, workers at some of the big airlines aren't buying into the need to open their pocketbooks again or agree to new terms that could mean the loss of their jobs. Members of the Association of Flight Attendants at United are now being asked to pony up $137.6 million a year in contract concessions and "hundreds of millions" through the termination of their pension plan, on top of $314 million a year in givebacks agreed after the bankruptcy filing. The demands are "disastrous" and are not "fair, equitable or necessary for a successful reorganization," said Greg Davidowitch, the union president, vowing to fight the company "at the bargaining table...and in court."
The Air Line Pilots Association at United called the proposed changes "dramatic." UAL seeks more than $191 million in extra savings from the pilots.
[post="199011"][/post]​
......OUCH!!!!!!!!!!!!!!!!!
 
well may be it is time either the mgmt teams at these big carriers stop getting paid for the next 5 yrs or the govt should step in and put big time big gaps into the the mgmt. just look at usair as a prime example of how bad mgmt is.