Judge Approves 21% Pay Cut at USAir

[BoilerUP]

US Airways Gets OK to Cut Workers' Pay
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Oct 15, 2:49 PM (ET)

By MATTHEW BARAKAT

ALEXANDRIA, Va. (AP) - A bankruptcy judge granted US Airways authority Friday to immediately cut the pay of its union workers by 21 percent through mid-February, saying the airline's situation is so dire that urgent action must be taken. [/font]

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Conveniently enough, well after the election and inauguration.

I feel bad for the Airways guys and gals, but seriously, how much longer can this last??? And how much of an impact (if any) will this have across the industry?

 

[Draginass]

The horse is laying on the ground with 3 broke legs. It's time to dismount and shoot it.

 

[328dude]

The horse is laying on the ground with 3 broke legs. It's time to dismount and shoot it.

Spoken like a true idiot. As long as it's not your carrier right? Is that how it works Draginass?

 

[Freddie Spencer]

Draginass is spot on... What's more important, you upgrading and your airline makin money, or some "horse with three broken legs"? After all we are just pilots, and all we care for are ourselves.

 

[Boeingman]

Lowcur rambles too much for that. At least there have been some occasions where I got paid for my lack of ability to say anything intelligent.

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Very astute observation. I think that rambling trait comes in handy for Lowiqer when he spools up his speech for insurance sales.

Of course his mail order career course in insurance must be jammed packed with aviation data and knowledge. Just look at all the brilliant posts by him.

 

[OhDannyBoy]

Judge grants USAir 21% paycut

Anyone know how this will affect the WOs PDT/PSA?

 

[350DRIVER]

The horse is laying on the ground with 3 broke legs. It's time to dismount and shoot it.

As sad as it may sound I think the time is getting near, the funeral director has been on stby for some time now. The bleeding cannot continue too much longer since in reality the blood is about to run dry. I think this is all too much too late. My thoughts go out to those folks that are directly being effected by this troubled carrier. I think the nail in the coffin was the Southworst invasion into PHL. Time is running out and somehow they are going to have to convince this judge that they can once again return to the days of being profitable and successful, a very difficult task ahead of them to put it mildly.

I recently was introduced to a female Bus captain/check airman who has been with Airways for many years and she just had her first interview with Fed Ex, kind of puts things into perspective. Sad, you work so hard for so many years only to have to start at the bottom of the ladder once again.

I wish em the best and much luck in these trying times. Maybe with a lot of luck and a miracle (or two) can allow Airways to continue to live to fight another year.

3 5 0

 

[dlredline]

I think the most ominous sign from yesterday's court hearing came from USAirways' lead attorney during his closing arguments. He stated even the original 23% percent pay cut, or roughly $33 million savings per month, may not be enough to help cushion the carrier against the slower winter travel period, high fuel costs and increasing competition.

This confirms some calculations I made in an earlier post where USAirways, pre-1113(e) ruling, was losing a little more than $56 million per month. This ruling still leaves them in the black. And remember that for every $1 increase in oil price adds another $2 million in losses each month. All this with "pie in the sky" provisions to maintain unrealistic cash balance positions while tapping further into the ATSB funding (those are taxpayer funds, folks, so each of us has a stake in the decisions Judge Mitchell makes here).

What will be interesting is how USAirways management responds to its own "transformation" plan. Judge Mitchell indicated yesterday that he was very reluctant to grant this motion because of the hardships on the employees. I doubt he would seriously consider another 1113(e) coming after more pay and benefits for the employees. So it's put up or shut up time for management to start running this airline, for a change.

Red

 

[tarp]

The last two paragraphs say everything you need to know about business:

"Leitch acknowledged the disparity but said it is made necessary by market forces. US Airways' attrition rate for nonunion workers - who make $52,000 annually on average - is dangerously high because other airlines are hiring them away at higher salaries.

But union wages in the airline industry are dependent on seniority, he said. So a flight attendant, for instance, might see his or her wages drop from $41 to $31 an hour as a result of the pay cut. But if they left US Airways to join another airline they'd have to start at the bottom of the ladder at $19 or $20 an hour."

Why are the Unions taking the hit? Because they can. Why is management not taking the big cuts? Because they will walk away.

So in the Arlington, VA area, US Airways HAS to pay a computer programmer $80,000 to stay and write programs so that the back office stuff keeps working. Because if US Airways cuts the pay to $50K, then the programmer just goes to AOL or Independence Air or to Lockheed Martin. But a pilot or mechanic can be cut down to almost nothing because their wage is matched against the very bottom of the seniority list at ANY airline.

It's sad but true. I've seen this before in my pre-aviation days and in a pre-aviation business. And you know what -- the judge is absolutely wrong. The business is just being run into the ground. We all joke or tease about "full pay to the last day". What do you think the CIO or CFO of US Airways is thinking right now? How can we SAVE this airline? Or, how can I maximize my income and benfits right now to last through what looks like a hard time finding a replacement job? You think we are greedy - you should see what the folks in the top layer are doing.

And the sad but true part is that very few people in this world now have loyalty. Back in the old days, Ford people were Ford people - the company gave them a job and a living and a sense of family. The people gave their heart and souls to Ford and there was no better car on earth (in their opinion). Havlichek played for Boston and there was no amount of money in this world that would have made him play for another team. I had a professor in school that was a retired Prudential Insurance bigwig - 34 years of service to Prudential - his life, his ethics and his loyalty were all wrapped up in that one insurance company.

In the 1950's had Ford gone into hard times, no person from the President to Janitor would have even thought of leaving the premises. A contribution to "keep the company alive" would have been a contribution from every living soul in that company and the top brass would have given more because they could.

Now, we just act like rats on a sinking ship. Times get rough for the CEO, CFO and COO and they just cash in their stock options and run like h-e- double toothpicks. The judges and newspapers still live in that magical yesterday where they think that "management" has some kind of stake in being "loyal" to the company. If they have to be "paid" to stay loyal, then they aren't very loyal.

I know this is nothing but commentary and doesn't help the US Airways folks at all. But my laymans' view from the outside is just this - company loyalty is dead. Business is no longer loyal to the employee and the employee has no further need to be loyal in return. Call us all free agents - maximize your profit potential whenever you get the chance - because only you will look out for your best interests.

Good luck guys - you're going to need it.

 

[Publishers]

It is almost a shame that airlines generate such cash flow that they can survive like this for so long. They are kept on life support long after they are dead.

On the other hand, Tarp, understand that the average college graduate of the eighties and nineties held seven different jobs over the first ten to 15 years in the work force. They were never very loyal in the first place.

Pilots jump ships in the corporate world every other day. Anything bigger, quicker, faster and they are gone.