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US Air's Unions Seen as Defiant

September 15, 2004|From Bloomberg News

US Airways Group Inc.'s unions, defying management's efforts to win labor concessions to keep the company afloat, are unlikely to give up pay and benefits despite a threat of court-imposed cuts, a labor leader and consultants said Tuesday.

US Airways sought bankruptcy protection from creditors Sunday after failing to win agreements for $800 million in concessions from the unions, including pilots, who refused to vote on a proposal, and mechanics, who declined to discuss the request. The airline, in its second trip to Bankruptcy Court in two years, said it would continue to seek agreements instead of asking the court to cancel contracts.

Pat Friend, president of the Assn. of Flight Attendants, said that even if there was an agreement, there was "no guarantee the members will accept that."

US Airways' workers are frustrated to be in Bankruptcy Court after two rounds of givebacks totaling $1.9 billion, said Phil Roberts, chairman of San Francisco-based Unisys R2A Transportation Management Consultants.

"Labor is right. It shouldn't all come from them," Roberts said.

The unions, particularly the mechanics and baggage handlers, want proof that US Airways will make operating changes this time, said Bob Mann, president of airline consulting firm R.W. Mann & Co.

The airline told U.S. Bankruptcy Court Judge Stephen Mitchell in Alexandria, Va., on Monday that it considered $135 million in pension obligations, including $110 million due today, to be a debt incurred before its Chapter 11 filing, making the payment unnecessary under bankruptcy law.

The company said in a court filing that it might freeze or terminate the pension plans.

US Airways shares rose 6 cents to $1.08 on Nasdaq.

The Arlington, Va.-based carrier said its shares would cease to be listed on Nasdaq on Sept. 22. Shares could trade over the counter.

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