<html><body> <tt> <BR> <BR> ----------------------------------------------------------------------<BR> This article was sent to you by someone who found it on SF Gate.<BR> The original article can be found on SFGate.com here:<BR> <a href="http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/12/22/MN209974.DTL";>http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/12/22/MN209974.DTL</a><BR> ----------------------------------------------------------------------<BR> Sunday, December 22, 2002 (SF Chronicle)<BR> Skies clearer for US Airways/Unions agree on new concessions to cut costs at bankrupt airline<BR> Jonathan Finer, Washington Post<BR> <BR> <BR> US Airways has filed its plan to emerge from Chapter 11 bankruptcy leaner<BR> and more efficient, after announcing it had wrapped up a second round of<BR> critical labor concessions by reaching tentative agreements with its<BR> flight attendants and machinists unions.<BR> The reorganization plan filed late Friday with the U.S. Bankruptcy Court<BR> in Alexandria, Va., predicts that major cost cutting, a restructuring of<BR> the airline's route system and the increased use of smaller regional jets<BR> by US Airways Express affiliates will help restore the company to<BR> profitability by 2004.<BR> The airline, based in Arlington, Va., is also counting on higher revenue<BR> from a new marketing agreement with United Airlines, but it noted that the<BR> plan could be jeopardized by United's own recent Chapter 11 filing.<BR> According to the plan, US Airways' annual operating costs will be reduced<BR> by around $1.9 billion through a combination of wage and benefit cuts,<BR> changes in its fleet, and various renegotiations of aircraft leases and<BR> vendor contracts. Overall, the company said, it will reduce its operating<BR> costs per seat mile flown by some 17 percent in 2003 compared with the<BR> first quarter of 2002.<BR> The company said it will maintain the same number of main-line jets<BR> through 2009, the same year it said it will complete repayment of a<BR> federally guaranteed loan already conditionally approved by the Air<BR> Transportation and Stabilization Board.<BR> The reorganized company's board would comprise eight members appointed by<BR> the Alabama state pension fund, its primary investor; four members<BR> appointed by various unions; its chief executive; and two independent<BR> directors to be named at a later date.<BR> Unsecured creditors could expect to be repaid no more than 10 cents out of<BR> each dollar owed while shareholders would receive nothing, according to<BR> the filing.<BR> The plan must be approved by creditors and is subject to renegotiation.<BR> Friday's agreements with the unions mean US Airways has completed<BR> negotiations with all its major labor groups. The airline negotiated<BR> concessions as part of its effort to secure the loan guarantees but in<BR> recent weeks said it needed $200 million a year more from workers because<BR> revenue projections proved too optimistic.<BR> Last week the Alabama pension fund threatened to cut off financing that it<BR> has been supplying to keep US Airways operating if the unions didn't<BR> budge. Fund officials could not be reached for comment Friday night.<BR> If the union deals "keeps the airline from liquidating, it's a positive<BR> development," said Jeff Zack, a spokesman for US Airways flight<BR> attendants.<BR> US Airways pilots on Dec. 14 approved new pay cuts, and the Communications<BR> Workers of America, which represents ticket and reservations agents,<BR> followed on Wednesday.<BR> The Association of Flight Attendants plans a ratification vote Jan. 10,<BR> Zack said. The International Association of Machinists' ratification vote<BR> will be in early January, but the date has not been set, according to Joe<BR> Tiberi, spokesman for the IAM.<BR> The machinists' agreement will save US Airways about $59 million a year<BR> through productivity enhancements, staffing flexibility and modifications<BR> to employee benefits plans, according to a statement released by the IAM.<BR> The company previously said it was seeking about $26 million in<BR> concessions a year from its flight attendants. Terms of that arrangement<BR> will not be released until union members are notified sometime next week,<BR> Zack said. <BR> ----------------------------------------------------------------------<BR> Copyright 2002 SF Chronicle<BR> <BR> </tt> <br> <tt> SkyOne--The Airline News Channel<BR> To Post message: Skyone@yahoogroups.com <BR> To Subscribe: Skyone-subscribe@yahoogroups.com <BR> To Unsubscribe: Skyone-unsubscribe@yahoogroups.com <BR> List owner: Skyone-owner@yahoogroups.com <BR> Skyone URL:<BR> <a href="http://www.yahoogroups.com/group/Skyone";>http://www.yahoogroups.com/group/Skyone</a></tt> <br> <br> <tt>Your use of Yahoo! Groups is subject to the <a href="http://docs.yahoo.com/info/terms/";>Yahoo! Terms of Service</a>.</tt> </br> </body></html>