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Business
Latest US Airways layoffs not so bad for region

Wednesday, November 27, 2002

By Frank Reeves, Post-Gazette Staff Writer

US Airways yesterday unveiled another round of major layoffs, but this time, the Pittsburgh region appears to have been spared.

The airline has already cut some 2,700 jobs from its Pittsburgh payroll since last year. The bulk of the 2,500 layoffs announced yesterday will come elsewhere.

The airline joins United, Delta and American airlines in seeking payroll savings because of the ongoing slump in travel and mounting inroads by low-cost competitors Southwest and Jet Blue. In the past month, the nation's three largest carriers unveiled plans to pare a combined 24,000 jobs.

Major carriers such as US Airways "are struggling with how to adapt to fundamental changes in the airline business, where high costs will no longer be subsidized by passengers paying premium fares and low-cost airlines have become a major force in the industry," US Airways Chief Executive David Siegel said in unveiling the new cuts.

The latest cutbacks will slash US Airways' payroll, which stood at 49,000 before the Sept. 11 attacks, down to 32,500.

Locally, its employment has fallen from 11,700 before the attacks to about 9,000. The impact of the latest cuts is uncertain since some work elsewhere is slated to be shifted here.

The newest cuts include 800 flight attendants; 700 to 800 ticket agents, customer service representatives, baggage handlers and reservation agents; and 66 pilots, whose ranks are scheduled to shrink by 1,900 as of the end of next April.

Florida took the brunt of the cuts, with the shutdown of a Tampa maintenance facility and the closing of a reservations center in Orlando eliminating 300 mechanics and 330 reservationist jobs, respectively.

US Airways said its maintenance facility at Pittsburgh International Airport will pick up some of the work the Tampa facility did on the narrow-body Airbus 319, 320, 321 jets as well as on its Boeing 737-300 and 737-400 aircraft. It also said work at its Orlando reservations center, which will close Jan. 10, will be transferred to offices in Green Tree and Winston-Salem, N.C.

Sixty-seven full-time and 19 part-time unionized customer service representatives, gate agents and baggage handlers at Pittsburgh International Airport will lose their jobs, the company, but because of "bumping rights" accorded senior employees, some workers laid off in Pittsburgh could choose to relocate to another US Airways facility.

The latest cuts didn't surprise industry analyst Darryl Jenkins, who heads the Aviation Institute at George Washington University in Washington, D.C. Every airline's "revenue projections are off. The revenue just is not coming back [since 9/11]," Jenkins said. With revenues down and costs continuing to rise, the airlines have little choice but to cut jobs and try to hold down costs, he said.

With revenue flat or declining and losses totaling $852 million in this year's first nine months, the airline has said it would need up to $1.6 billion in annual cuts -- $400 million more than originally projected -- to qualify for a federal loan guarantee to get out of bankruptcy. US Airways' attempt to secure $900 million in loan guarantees is crucial to its survival if it emerges out of bankruptcy protection.

The airline, which filed for Chapter 11 bankruptcy protection in August, said it has begun negotiations with its unions to overhaul "inefficient" work rules, which the company blamed, in part, for driving up costs and putting it at a competitive disadvantage with low-cost carriers.

The company is expected to move quickly since it has said it intends to file its restructuring plan with the federal bankruptcy court by Dec. 20 -- though it has asked the court to extend the deadline a month

Flight attendants, stung by the latest furloughs that will slash its ranks from about 10,000 before the attacks to below 6,000, yesterday balked at making any further concessions until management agrees to significant wage-and-benefit cuts over the next six years.

Siegel could find coaxing additional concessions from the airline's other unionized workers a tough sell as well. Unionized workers already have agreed to nearly $900 million in annual wage and benefit cuts over the next 6 1/2 years.

"We are very disappointed in management. They appear to be attempting to restructure the company on the backs of labor. Management has shown very little creativity in turning this company around," said Roy Freundlich, spokesman for the Air Line Pilots Association.

Chris Fox, president of Communications of America Local 1330, which represents the airline's reservation, gate and ticket agents, agreed. "It is beyond me how you can shrink an airline into profitability."

In September, the CWA approved $75 million in annual wage and benefit concessions. But Fox said that in meetings this week, the company wants an additional $11.2 million in annual concessions, boosting the total to $87.2 million. The airline is also asking for permission to "outsource" some of the work now done by CWA members. The company has given the union until Monday to respond.


Frank Reeves can be reached at freeves@post-gazette.com or 412-263-1565.

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