US Airways furloughs 2,500, seeks more cost cuts

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US Airways furloughs 2,500, seeks more cost cuts

NEW YORK (Reuters) =97 US Airways Group, which is operating under Chapter 11=
=20
bankruptcy protection, said Tuesday it will furlough another 2,500 workers=
=20
over the next three months as it looks for new ways to cut costs. The=20
airline said it had started meeting with its unionized labor groups to talk=
=20
about possible changes in work rules and other measures that could slash=20
more costs but still adhere to protections US Airways gave its workers when=
=20
they signed cheaper contracts. The furloughs, which US Airways said will=20
affect all of its work groups, come on top of $1.3 billion in annual cost=20
savings already secured by the airline as it restructures. Furloughed=20
workers are essentially laid off, but are given hiring priority if the=20
airline fills job spots in the future. US Airways has said it needs to cut=
=20
as much as $1.6 billion a year to offset its disappointing revenue growth.=
=20
It plans to file its plan of reorganization by mid-December and emerge from=
=20
bankruptcy in March.

"Our airline has some of the most inefficient work rules in the industry=20
that drive up our costs in ways we can no longer afford in this new, tough=
=20
revenue environment," US Airways' President and Chief Executive David=20
Siegel said in a written statement. US Airways, which said it currently has=
=20
about 35,000 active workers, has already trimmed its employee base by=20
almost 2,500 jobs since it filed for bankruptcy in August. Its workforce is=
=20
nearly 30% smaller than it had been before the Sept. 11, 2001 attacks. US=20
Airways said it was still committed to preserving some jobs by keeping all=
=20
of the current 279 aircraft in its fleet. The airline has rejected scores=20
of aircraft leases to whittle down its passenger capacity and save on=20
expenses. But stubbornly low air fares and softer demand, particularly from=
=20
business travelers, has battered airlines' forecasts for revenue growth and=
=20
forced US Airways to be more creative with its cost cutting.

To save money through changes in work rules, airlines can replace=20
overqualified workers in certain positions with lower-paid workers, for=20
example, or ask crews to work more hours. "The good news is that changing=20
some of these rules will make us more competitive, without the need to=20
further reduce pay rates," Siegel said. Roy Freundlich, a spokesman for the=
=20
Air Line Pilots Association, said talks between pilots and the airline over=
=20
any such changes were in their infancy. "It's really something that has not=
=20
even begun to be addressed, Freundlich said. "Right now, we might not agree=
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to anything."
He had not heard how many pilots, if any, were affected by the furloughs.=20
The airline said it will immediately close a heavy maintenance hangar in=20
Tampa, while a reservations call center in Orlando will shut down on Jan.=20
10. Workers with seniority at those locations will be able to move to other=
=20
operations in Pennsylvania and North Carolina.


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