Rottweiller
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Wednesday June 5, 9:57 am Eastern Time
Reuters Business Report
Union: US Air Pilots Offer Concessions
NEW YORK (Reuters) - US Airways Group Inc.'s (NYSE:U - News) pilots union has offered to cut wages and benefits by about half of what the struggling carrier wants, a union spokesman said Wednesday, as the airline seeks concessions to ensure it gets federal loan guarantees.
The Air Line Pilots Association, representing nearly 6,000 pilots, offered to cut a total of $328 million annually for seven years, union spokesman Roy Freundlich said. US Air, the No. 6 U.S. carrier coping with huge financial losses, in May asked the union for $595 million in concessions as it prepares to ask the guarantees.
A spokesman for US Air was not immediately available for comment. The two sides will resume negotiations over concessions this morning in Washington, Freundlich said.
The airline, based in Arlington, Virginia, has targeted $1.2 billion in cost cuts from workers, suppliers and lenders as it asks the government to back $1 billion in loans from the private sector.
US Air posted a $2.1 billion loss last year and a first-quarter 2002 shortfall of $269 million. Its cash dwindled to just over $500 million at the end of the first quarter as airline traffic remained below normal levels and fares were too cheap to be profitable.
In its first public offer, the union also said it would allow US Airways to more than double the number of regional jets in it network, and let the company code-share with other U.S.-based carriers, union spokesman Roy Freundlich said.
US Air could generate as much as $500 million a year in additional revenues from the regional jets offer and code-sharing concession. They would permit the airline to cross-market routes and tickets with other carriers, as well as honor frequent flyer awards of rivals, Freundlich said.
DEADLINE LOOMS
US Air has until June 28 to apply for the guarantees under the program, set up by Congress as one attempt to shore up the finances of U.S. air carriers in the aftermath of the Sept. 11 attacks. But airlines are expected to file their documents in mid-June to avoid last-minute hassles.
US Air shares, pressured by weakening finances and fears of possible Chapter 11 bankruptcy, added 4 cents at $3.29 Wednesday on the New York Stock Exchange.
Of top carriers, only America West Holdings Corp (NYSE:AWA - News) has gotten the federal loan guarantees after securing labor concessions. A request by tiny Vanguard Airlines recently was rejected.
United Airlines parent UAL Corp. (NYSE:UAL - News) is also weighing a loan guarantee application and was also seeking concessions from its unions.
Reuters Business Report
Union: US Air Pilots Offer Concessions
NEW YORK (Reuters) - US Airways Group Inc.'s (NYSE:U - News) pilots union has offered to cut wages and benefits by about half of what the struggling carrier wants, a union spokesman said Wednesday, as the airline seeks concessions to ensure it gets federal loan guarantees.
The Air Line Pilots Association, representing nearly 6,000 pilots, offered to cut a total of $328 million annually for seven years, union spokesman Roy Freundlich said. US Air, the No. 6 U.S. carrier coping with huge financial losses, in May asked the union for $595 million in concessions as it prepares to ask the guarantees.
A spokesman for US Air was not immediately available for comment. The two sides will resume negotiations over concessions this morning in Washington, Freundlich said.
The airline, based in Arlington, Virginia, has targeted $1.2 billion in cost cuts from workers, suppliers and lenders as it asks the government to back $1 billion in loans from the private sector.
US Air posted a $2.1 billion loss last year and a first-quarter 2002 shortfall of $269 million. Its cash dwindled to just over $500 million at the end of the first quarter as airline traffic remained below normal levels and fares were too cheap to be profitable.
In its first public offer, the union also said it would allow US Airways to more than double the number of regional jets in it network, and let the company code-share with other U.S.-based carriers, union spokesman Roy Freundlich said.
US Air could generate as much as $500 million a year in additional revenues from the regional jets offer and code-sharing concession. They would permit the airline to cross-market routes and tickets with other carriers, as well as honor frequent flyer awards of rivals, Freundlich said.
DEADLINE LOOMS
US Air has until June 28 to apply for the guarantees under the program, set up by Congress as one attempt to shore up the finances of U.S. air carriers in the aftermath of the Sept. 11 attacks. But airlines are expected to file their documents in mid-June to avoid last-minute hassles.
US Air shares, pressured by weakening finances and fears of possible Chapter 11 bankruptcy, added 4 cents at $3.29 Wednesday on the New York Stock Exchange.
Of top carriers, only America West Holdings Corp (NYSE:AWA - News) has gotten the federal loan guarantees after securing labor concessions. A request by tiny Vanguard Airlines recently was rejected.
United Airlines parent UAL Corp. (NYSE:UAL - News) is also weighing a loan guarantee application and was also seeking concessions from its unions.
