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US Airways, pilots say talks productive as Friday deadline looms

Saturday, June 22, 2002

By Jim McKay, Post-Gazette Staff Writer

All eyes are on the pilots union at US Airways as the airline races against the clock in its bid to wrest $1.2 billion in concessions from employees and suppliers and restructure with the help of a federal loan guarantee.

The pilots represent the biggest potential source of savings for US Airways, which has said it hopes to settle with its unions by Friday, the deadline for amending an application for a $1 billion loan guarantee from the Air Transportation Stabilization Board.

As a result, unions representing flight attendants, mechanics and fleet service workers appear to be in a holding pattern as they await the result of talks between management and the Air Line Pilots Association.

"If management can't reach a deal with the pilots, everything falls apart in terms of getting the loan guarantee from the government," the Association of Flight Attendants told its members in a recent hot line message.

US Airways says the cost reductions and loan guarantee, allowed by Congress to aid airlines harmed by the Sept. 11 terrorist attacks, are necessary in order to avoid Chapter 11 bankruptcy.

Yesterday, US Airways and ALPA suggested they were making progress. They recessed for the weekend and will resume Monday in Washington, D.C. ALPA represents about 5,300 pilots, 1,070 of whom are currently furloughed.

The pilots have so far offered a package of concessions that ALPA says are worth more than $400 million a year, a substantial amount but still below the $595 million the company asked of the union in May.

"With each session, we're coming closer and closer on the issues, so the negotiations are productive," Roy Freundlich, a pilot and spokesman for ALPA, said yesterday afternoon.

"They're making great progress," added David Castelveter, a US Airways spokesman. "No agreement is in place yet, but we hope to have one soon."

The pilots union and company have so far agreed that the new contract would run from July 1 to Dec. 31, 2008. A 1 percent lump-sum payment due pilots next year will not occur.

Discussions appear to be close on wage reductions. Although that issue remained open yesterday, both sides have tentatively agreed that pay cuts will be no less than what pilots earned on April 30, 2001, thus eliminating raises of 16.99 percent received on May 1, 2001 and 16 percent received on May 2 of this year.

Freundlich said the union has also offered to substantially increase the number of regional or small jets that the airline can fly and to permit partnership, or code-sharing, arrangements with other airlines. He said those two items could potentially increase revenue for the airline by $500 million annually.

What the pilots eventually agree to is key to all the other labor agreements moving forward, according to the flight attendants union, which is proposing to tie its concessions to any deal by the pilots. If the pilots, for example, agree to give the company 80 percent of what it seeks, flight attendants will do likewise.

So far the AFA has offered concessions valued at $61 million a year, including wage cuts and elimination of two 2 percent wage increases scheduled this year and next. The airline is seeking $91 million from flight attendants.

The International Association of Machinists suspended talks this week. The union has told its members -- mechanics and fleet service workers -- that the issues are complex.

Frank Schifano, president of the IAM Lodge 1976 in Moon, said his union was also awaiting results of the company's talks with the pilots union and expects to resume discussions next week. "We're committed to doing what's right as far as everyone else does."

The Communications Workers of America, which represents some 7,000 passenger service and reservation workers and is one of the newest unions at the airline, has offered cost savings the union values at $83,000 per employee over seven years.

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