US Airways may say farewell to Chapter 11 By Barbara De Lollis and Kathy Kiely, USA TODAY Two major airlines moved closer to fixing some of their money problems over the weekend as a possible aid package for the industry took shape in the Senate. US Airways is expected to emerge today from a seven-month reorganization under a bankruptcy court's supervision. It would be the first airline to complete a Chapter 11 restructuring since the Sept. 11 attacks. The federal government is guaranteeing $900 million of a $1 billion loan for the company. The airline has cut flying capacity by about a third since 2000 and cut operating costs, but kept its mainly East Coast route system intact. Still, reduced travel since the war with Iraq began has forced a temporary pay deferral of 5% for employees. "We continue to re-examine every element of our cost structure, continue to challenge the conventional wisdom and make sure we're doing everything we can to adapt in this environment," CEO David Siegel said in an interview Sunday. "It's absolutely the most difficult this industry has ever faced." Meanwhile, American Airlines' pilots union Sunday offered a package of pay cuts and new work rules that could save that airline $660 million a year. American parent AMR, the nation's largest airline, is trying to cut $1.8 billion a year in labor expenses in an attempt to avoid seeking bankruptcy court protection itself. But some industry analysts warn that the war's impact might make it impossible for AMR to avoid seeking bankruptcy court protection. The industry is pleading for as much as $4 billion in federal aid to cover security and insurance costs. Senate Republican leaders are discussing a $2 billion package that would extend airlines' war risk insurance one year, reimburse airlines for security costs such as reinforced cockpit doors and temporarily suspend a security ticket tax of up to $10 for a round trip. There were indications that the package might win bipartisan support in the House and Senate this week. But the airlines' aid campaign took a public relations hit last week after disclosures that several carriers paid their top executives millions of dollars in compensation in 2002 while they were losing money and eliminating jobs. Delta Air Lines, for example, which lost $1.3 billion last year, awarded $17.3 million in executive bonuses and set aside $25 million more for executive pensions in case Delta goes bankrupt. Filings with the Securities and Exchange Commission show that Delta CEO Leo Mullin received about $12.9 million in compensation last year; Continental CEO Gordon Bethune, $11.9 million; and Northwest Airlines CEO Richard Anderson, $2.8 million. Airlines defended the payouts as necessary to keep management teams intact and merited by the executives' leadership in 2002. Senate Commerce Committee Chairman John McCain, R-Ariz., told reporters last week he's "angry" about the pay packages and threatened to insert legislative language requiring airline executives to forgo raises in exchange for aid. Contributing: Contributing: Marilyn Adams *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week:http://www.ttsailing.org/ TnT Webdirectory: http://search.co.tt *********************************************************