I didn't write this headline either! Walter DCA US Airines to seek concessions under plan this week By Julie MacIntosh NEW YORK, May 13 (Reuters) - US Airways (U) is preparing to ask labor unions to offer concessions on wages and possibly other issues as part of a restructuring plan to be unveiled this week, analysts said, and the carrier is warning that failure to slash costs could mean bankruptcy. US Airways' Chief Executive David Siegel said in a letter to employees on Friday that the air carrier, the nation's sixth-largest, plans to file for a loan guaranteed by the government. It first revealed its intention to boost liquidity by applying for the loan in mid-April, but analysts say that without a restructuring plan, the government may be loathe to grant the loan. In what analysts saw as a move to put pressure on labor unions, suppliers, and other stakeholders, Siegel warned US Airways could be forced to file for bankruptcy if it does not see significant concessions that will rein in costs. A US Airways spokesman would not release details of the draft of its restructuring plan, which the pilots' union expects it will see for the first time on Thursday. But as the June 28 deadline for filing applications nears, the airline's need to extract worker concessions to satisfy government conditions for the loan is intensifying. "What the loan guarantee board made clear was that they weren't going to give the money out unless they felt there was a sound business plan," said Glenn Engel, an analyst with Goldman Sachs. "It's going to be hard to convince them there's a sound business plan in either case unless there are labor concessions," Engel said. UAL Corp.'s (UAL) United Airlines, which has also said it might apply for a government-backed loan, took a step toward possible worker concessions this weekend as the approval of labor contracts suggested further talks could be near. But analysts said that US Airways, with the highest fixed costs of any major carrier, is in desperate need of the government assistance, while United has better liquidity and can use the loan offer as a carrot to encourage labor to concede on some issues. UAL shares closed nearly 20 percent higher after the contract approvals and an analyst upgrade on the stock, while shares of US Airways closed more than 17 percent lower at $2.98. CONCESSIONS A NECESSITY "(US Airways) has one very visible source of potential cost reductions -- labor -- although the odds of getting significant concessions there are questionable," Credit Suisse First Boston analyst James Higgins said. The US Airways Master Executive Council, which represents pilots from all of the airline's crew bases, said on its Web site it has scheduled a meeting in Washington on Thursday to review the restructuring plan after it is presented. Analysts said that without concessions from labor, the carrier's plan to resurrect business using the government loan, more regional jet service, and a potential code share alliance might not be enough to save the airline. US Airways' business was severely damaged following the Sept. 11 attacks, due in part to the temporary closure of Washington D.C.'s Reagan Washington National Airport, from which it currently runs more than 150 flights daily. Travelers on the East Coast, where US Airways runs its greatest concentration of flights, were more reluctant to fly after Sept. 11, and its market share has been whittled away by competitors running larger fleets of regional jets. "From a financial perspective, US Airways has never lost so much in such a short period of time," Siegel said. The cash-strapped carrier will try to stop the bleeding by petitioning the Air Transportation Stabilization Board for a loan guarantee regardless of the internal reaction to its restructuring plan, US Airways spokesman David Castelveter said, although it would prefer to do so with consensual agreement from its employee groups. ©2002 Reuters Limited.