lowecur
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- Sep 14, 2003
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This is the temporary cuts needed to keep operating while 1113 works itself out. Note the request to begin reducing the fleet from a minimum of 279 a/c. Are job actions right around the corner?
September 24, 2004
US Airways to Ask Court to Cut Union Workers' Pay 23%
By MICHELINE MAYNARD
US Airways plans to ask a bankruptcy court judge today to impose emergency pay cuts of 23 percent on its major unions, which have refused the company's demand for $800 million in contract concessions.
The airline, in letters sent to its unions yesterday, also said it would reduce or stop contributions to some employee retirement plans and would end its commitment to keep 279 aircraft in its fleet. It made the pledge to keep the aircraft when it emerged from bankruptcy protection last year.
US Airways told its unions on Wednesday that it would seek the cuts unless it reached agreements for contract concessions. US Airways did not announce similar pay cuts for its management and salaried staff. But a company spokesman, David Castelveter, said last night, "We have been very clear that everyone, management included, will participate" in the restructuring plan. The airline does not need court permission to impose cuts on nonunion employees.
In the letters to the unions, Jerrold A. Glass, senior vice president of employee relations, said the airline had to seek the cuts "in order to stabilize our cash flow during this traditionally slow fall and winter period, in which we are also experiencing high fuel prices and a revenue environment" driven by low-fare carriers.
Mr. Castelveter declined to comment on how much money the cuts would save.
US Airways filed for its second bankruptcy in two years on Sept. 12. Its 28,000 employees have refused to grant the airline a third round of wage and benefit cuts on top of two granted during its first bankruptcy, from which it emerged in April 2003.
The airline was not able to obtain debtor-in-possession financing, a feature of most bankruptcies, because its assets are pledged to secure a package of loans guaranteed by the federal Air Transportation Stabilization Board.
Instead, the airline is operating on its cash reserves, which stood at $750 million when it sought bankruptcy protection. Company officials previously said they would seek emergency cuts to generate more cash.
Bankrupt companies are allowed to seek emergency cuts under Section 1113 of the federal bankruptcy code. The code also allows a company to ask the bankruptcy judge to set aside labor contracts and impose permanent, less-generous terms. Such a move often follows a request for emergency cuts.
The bankruptcy judge can impose the emergency cuts after a court hearing. Workers do not get to vote on the reductions.
If the airline seeks to replace its labor contracts permanently, the judge would have 60 days to issue an order. In that time, companies and unions sometimes agree on wage and benefit cuts, and the judge could then impose contract terms on those that do not.
In letters to its unions, the airline said that the emergency cuts would be in effect immediately, and continue either through the pay period after March 31, until the airline reached agreements with its unions, or until the court ordered permanent reductions.
US Airways, which did not make a required $110 million quarterly pension contribution on Sept. 14, said it planned different steps for its various pension programs.
The company told the Air Line Pilots Association that it would cut its contribution to pilots' traditional pension plan to 10 percent, from 38 percent, and told mechanics it would stop contributing to their 401(k) plan. The company's letter to the Association of Flight Attendants did not mention pensions.
In a statement, the pilots' union said it would oppose the effort in bankruptcy court, but that it would continue to negotiate with the airline on permanent contract terms. The union representing flight attendants, which estimated the cuts were equal to half the concessions sought by the company, said it would try to persuade the company to reduce the amount.
The International Association of Machinists and Aerospace Workers, which represents mechanics and other ground personnel, said it was asking the airline for more information and that it would fight to protect workers' contracts in court.
September 24, 2004
US Airways to Ask Court to Cut Union Workers' Pay 23%
By MICHELINE MAYNARD
US Airways plans to ask a bankruptcy court judge today to impose emergency pay cuts of 23 percent on its major unions, which have refused the company's demand for $800 million in contract concessions.
The airline, in letters sent to its unions yesterday, also said it would reduce or stop contributions to some employee retirement plans and would end its commitment to keep 279 aircraft in its fleet. It made the pledge to keep the aircraft when it emerged from bankruptcy protection last year.
US Airways told its unions on Wednesday that it would seek the cuts unless it reached agreements for contract concessions. US Airways did not announce similar pay cuts for its management and salaried staff. But a company spokesman, David Castelveter, said last night, "We have been very clear that everyone, management included, will participate" in the restructuring plan. The airline does not need court permission to impose cuts on nonunion employees.
In the letters to the unions, Jerrold A. Glass, senior vice president of employee relations, said the airline had to seek the cuts "in order to stabilize our cash flow during this traditionally slow fall and winter period, in which we are also experiencing high fuel prices and a revenue environment" driven by low-fare carriers.
Mr. Castelveter declined to comment on how much money the cuts would save.
US Airways filed for its second bankruptcy in two years on Sept. 12. Its 28,000 employees have refused to grant the airline a third round of wage and benefit cuts on top of two granted during its first bankruptcy, from which it emerged in April 2003.
The airline was not able to obtain debtor-in-possession financing, a feature of most bankruptcies, because its assets are pledged to secure a package of loans guaranteed by the federal Air Transportation Stabilization Board.
Instead, the airline is operating on its cash reserves, which stood at $750 million when it sought bankruptcy protection. Company officials previously said they would seek emergency cuts to generate more cash.
Bankrupt companies are allowed to seek emergency cuts under Section 1113 of the federal bankruptcy code. The code also allows a company to ask the bankruptcy judge to set aside labor contracts and impose permanent, less-generous terms. Such a move often follows a request for emergency cuts.
The bankruptcy judge can impose the emergency cuts after a court hearing. Workers do not get to vote on the reductions.
If the airline seeks to replace its labor contracts permanently, the judge would have 60 days to issue an order. In that time, companies and unions sometimes agree on wage and benefit cuts, and the judge could then impose contract terms on those that do not.
In letters to its unions, the airline said that the emergency cuts would be in effect immediately, and continue either through the pay period after March 31, until the airline reached agreements with its unions, or until the court ordered permanent reductions.
US Airways, which did not make a required $110 million quarterly pension contribution on Sept. 14, said it planned different steps for its various pension programs.
The company told the Air Line Pilots Association that it would cut its contribution to pilots' traditional pension plan to 10 percent, from 38 percent, and told mechanics it would stop contributing to their 401(k) plan. The company's letter to the Association of Flight Attendants did not mention pensions.
In a statement, the pilots' union said it would oppose the effort in bankruptcy court, but that it would continue to negotiate with the airline on permanent contract terms. The union representing flight attendants, which estimated the cuts were equal to half the concessions sought by the company, said it would try to persuade the company to reduce the amount.
The International Association of Machinists and Aerospace Workers, which represents mechanics and other ground personnel, said it was asking the airline for more information and that it would fight to protect workers' contracts in court.
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