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Airline asks judge to cancel labor pacts

By Matthew Barakat
The Associated Press

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ALEXANDRIA, Va. — US Airways asked a bankruptcy judge yesterday to cancel labor contracts with three of its unions and impose much lower pay so it can move ahead with a plan to permanently cut costs, reposition itself as a low-cost carrier and avoid possible liquidation.

The 120-page court filing also asks the judge to eliminate retiree health benefits and cancel its two remaining pension plans, which provide benefits to its machinists and flight attendants.

The airline is asking the judge to impose new labor contracts with pay cuts ranging from 6 percent to 27 percent for various employee groups, and work rules that unions say would result in significant job losses.

"If they do not obtain these financial accommodations ... it is highly likely that they will have to begin the commencement of an orderly liquidation" as soon as January, when the bankrupt airline's interim financing deal expires, US Airways' lawyers said.

A hearing on the issue is scheduled for Dec. 2. The airline is continuing negotiations with its unions, and will withdraw its request for any union that ratifies a new contract.

So far, the airline has new deals in place with its pilots and its smaller Transport Workers Union.

But it is still negotiating with the International Association of Machinists, the Association of Flight Attendants and the passenger-service employees represented by the Communications Workers of America, who collectively represent a majority of the airline's 28,000 mainline employees.

US Airways employs 34,000 overall. Bankruptcy Judge Stephen Mitchell, who is presiding over the case, has already allowed the airline to impose 21 percent pay cuts on workers represented by the machinists' and flight attendants' unions and the CWA.

Unions have been upset about the severity of the cuts sought by the airline, considering that they already made substantial concessions in the first bankruptcy reorganization and that most management employees are taking only a 5 percent pay cut.

Copyright © 2004 The Seattle Times Company

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