US Airways Faults Delta on Rivalry Tuesday September 17, 7:14 PM EDT WASHINGTON, Sep 17, 2002 (AP Online via COMTEX) -- The president of US Airways accused Delta Air Lines of anticompetitive behavior Tuesday, criticizing an alliance Delta is pursuing with two other major carriers. "Delta's strategy is built on one basic element: US Airways' failure," the company's president, David Siegel, said in reference to Delta's proposed code-share agreement with Continental Airlines and Northwest Airlines. Siegel referred to the proposed Continental-Delta-Northwest partnership as the "Axis of Evil" and called Delta Chairman Leo Mullin "Dr. Evil." Under the proposed agreement, the airlines would sell seats on each other's flights and travelers would be able to get frequent-flier miles on any of the airlines. <http://ae.excite.com/adclick/CID=000057857d9372bc00000000/acc_random=46 86989254/site=excite/area=money.news/aamsz=336x280> Siegel, who is trying to reorganize US Airways in bankruptcy court, delivered his unusually blunt speech to the International Aviation Club of Washington. His comments were an apparent response to previous statements made by Mullin, who said he would pursue "an armada" of products and subsidiaries to combat a similarly proposed alliance between US Airways and United Airlines. A Delta spokeswoman denied the three-way alliance being proposed aims to put US Airways out of business. US Airways, the nation's seventh-largest carrier, filed for bankruptcy Aug. 11 and has made numerous changes in recent months to get its cost structure in line. Seven of its nine union locals have agreed to wage cuts totaling about $619 million a year; the remaining locals concluded voting Tuesday evening on proposals for an additional $221 million in cuts. One of the two unions, the Communication Workers of America, ratified its concession package by a 3-to-1 ratio. The deal calls for an 8 percent pay cut, dropping the top rate for its 8,000 passenger service employees to $20.05 an hour. Employees making less than $30,00 a year are exempt from the deal. The amended contract will save the airline $70 million a year. The last remaining union local, the 6,600 mechanics represented by the International Association of Machinists, was expected to announce its results late Tuesday or early Wednesday. The union rejected the same deal last month by a 57-43 margin, but decided to vote again. Union officials said some members were unclear about the consequences of a no vote. If the union rejects the concessions, it's possible that a bankruptcy judge will invalidate the entire collective bargaining agreement, and the airline could impose its own pay schedule and work rules. Union leadership offered workers no recommendation on the proposal. US Airways has eliminated hundreds of flights on unprofitable routes, greatly expanded the use of smaller, cheaper regional jets and proposed a code-sharing agreement with United Airlines, which allows the two carriers to sell tickets on each other's flights. The Delta alliance would be 50 percent larger than the US Airways alliance and would constitute 40 percent of all domestic air traffic, Siegel said. In addition, he said, the Delta alliance is anticompetitive because it includes more overlapping routes. The United-US Airways alliance would feature complementary routes, combining US Airways' strength in north-south flights on the East Coast with United's strength in cross-country flights. Delta spokeswoman Catherine Stengel acknowledged that the proposed Delta alliance is in part a response to the US Airways alliance. But she said the company is not trying to put US Airways out of business. "US Airways is clearly a competitor on key markets such as the East Coast," she said. "We welcome all healthy competition." The two airlines compete in several markets, particularly the lucrative shuttle service between Washington, Boston and New York. The Justice Department is reviewing both proposals. Siegel said he is confident that the US Airways-United alliance will receive approval in the near future. Last year, the Justice Department rejected a full-scale merger between the two airlines. By MATTHEW BARAKAT AP Business Writer Copyright 2002 Associated Press, All rights reserved