US Air labor wary, pilots to weigh revenue problem

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US Air labor wary, pilots to weigh revenue problem  =

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Thursday November 14, 3:14 PM EST =


By Julie MacIntosh

NEW YORK, Nov 14 (Reuters) - US Airways Group (UAWGQ) will seek further c=
oncessions from its workers to help slash costs and salvage its business,=
 and the airline's pilots say they now plan to look at the company's fina=
nces themselves to measure the extent of its problems.

US Airways said last month it may need to cut as much as $1.6 billion in =
yearly costs to emerge from bankruptcy protection, $300 million more than=
 it has already secured through widespread wage cuts and other measures.

The Arlington, Virginia-based carrier initially said it would try to meet=
 the goal by negotiating with its lenders. But sources close to the airli=
ne say it now plans to ask labor unions to approve changes in worker rule=
s and productivity that could significantly reduce expenses.

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The No. 6 U.S. air carrier says its revenue growth is coming in below tar=
get, forcing it to slash more costs. The entire airline industry has stru=
ggled for more than a year with persistently low air fares and reduced de=
mand.

US Airways met with mechanics and pilots recently to express its concerns=
 over the anemic revenue environment, labor group spokesmen said on Thurs=
day.

US Airways officials had no comment on talks with the carrier's labor gro=
ups. But workers bristled at word that the airline may request changes in=
 work rules. It could ask, for example, that certain jobs be staffed by l=
ower-paid employees, one source said.

The airline's pilots, who ratified $465 million in annual wage cuts and o=
ther concessions in August, have watched their wages drop by a quarter or=
 more. Their numbers will have dropped by about 30 percent when the most =
recent round of announced furloughs is finished in April.

"Both sides agreed it was enough, and for them to come back for more at t=
his point in time has everybody very concerned," said Roy Freundlich, spo=
kesman for the Air Line Pilots Association.

Joseph Tiberi, spokesman for International Association of Machinists' 12,=
200 members at the airline, said the group had been told when they ratifi=
ed earlier proposals that US Airways would not come back and ask for addi=
tional cuts.

"It's odd that now they're coming back and maybe asking for more, when ou=
r members gave them exactly what they wanted two months ago," he said.

SCROUNGING FOR REVENUE

Freundlich said no talks have yet taken place over reducing costs through=
 worker productivity changes. But pilots' representatives met with US Air=
ways management in closed session recently to address revenue concerns, h=
e said.

The pilots agreed to let their negotiating team look at US Airways' finan=
ces and other relevant data to determine the gravity of the airline's lat=
est problems, Freundlich said.

"We're going to take a look and see what the real problems are," he said.=
 "If we determine that we can help the company in any way, we will. If we=
 can't, we won't."

The representatives also authorized talks over a proposal that could let =
affiliates of US Airways fly some 70-seat regional jets instead of its ne=
w wholly owned subsidiary MidAtlantic Airways.

Regional jets are smaller than jets used to carry passengers on longer ro=
utes and can be operated more cheaply than larger planes. They can also h=
elp airlines realize profits in small markets where big jets would offer =
too much capacity.

But because pilots are paid less to fly the smaller aircraft, labor contr=
acts require US Airways to seek approval from its pilots for plans relate=
d to the jets.

Regional jets could be in the air at US Airways affiliates, like Mesa Air=
 Group (MESA), more quickly because they have less trouble getting airlin=
e financing than bankrupt US Airways and its subsidiaries, sources said.

"One of the options here is allowing them to increase revenue by getting =
small jets quicker," he said.

If something similar to the proposal were approved, pilots might sacrific=
e potential jobs for some of their furloughed members. All pilot position=
s on planes going to MidAtlantic will be filled by US Airways pilots unde=
r a current agreement.

But if the planes go to affiliate carriers, opportunities for US Airways =
pilots to return to work could drop. Only 50 percent of the vacancies at =
some affiliate carriers now go to furloughed US Airways pilots. Freundlic=
h expected that percentage could be modified during negotiations. =



=A92002 Reuters Limited. =


Roger
EWROPS

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