This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx US Airways, Citing War, Imposes Pay Cut March 30, 2003 By MICHELINE MAYNARD DETROIT, March 29 - On the eve of its planned emergence from bankruptcy, US Airways notified employees today that it would immediately impose a 5 percent cut in wages. The company said a drop in bookings in the wake of war with Iraq left it no alternative to try to recover lost revenue. The airline's disclosure was made in a letter sent to employees this weekend by David N. Siegel, chief executive of the US Airways Group, the airline's parent company. The letter was posted on an employee Web site, and a company spokeswoman confirmed today that the cuts would be made. The airline, which is set to come out of Chapter 11 bankruptcy on Monday, said that it was invoking a clause in its contracts that allows it to institute the cuts in the event of war. The cuts are actually pay deferrals that must be restored after the first quarter in which the airline reports a profit, or no later than 18 months after the cuts take effect. The 5 percent cuts will take effect on Monday or Tuesday, depending on the start of each employee's pay period, and will show up in paychecks later in the month. They apply to every employee at the airline, which is the nation's seventh largest. The airline said it would reassess the need for the cuts on a monthly basis, in hopes the deferrals could be restored quickly. US Airways, which has not earned an annual profit since 1999, has said under its restructuring plan that it does not expect to be profitable again until 2005. US Airways said last week that it would cut 4 percent of its flights in response to lower bookings. Across the industry, more than 10,000 workers have been laid off by major airlines since the war began. In the letter to employees, Mr. Siegel said the airline had tried to avoid making the cuts, which come on top of $1.8 billion in concessions granted by its employees as part of its restructuring plan. "We know this is an additional sacrifice, but these are extraordinary circumstances," Mr. Siegel said. "While our bankruptcy reorganization provides for a much brighter future, US Airways is still in a very fragile state." The airline told employees that the cuts would not necessarily be restored immediately after war ceases. It said other factors could play a role, including a continued reduction in bookings or higher fuel prices. US Airways filed for bankruptcy last summer, blaming lower traffic in the wake of the attacks on Sept. 11, 2001. United Airlines, the nation's second-largest carrier behind American Airlines, and Hawaiian Airlines, the nation's 12-largest carrier later joined it in bankruptcy. Officials at American are investigating whether it, too, will file for Chapter 11 restructuring. http://www.nytimes.com/2003/03/30/business/30AIR.html?ex=1050035906&ei=1&en=47a15b488cc40dba HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company