Atlantic Coast Pilots Agree to Wage Cuts

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Atlantic Coast Pilots Agree to Wage Cuts
By Amy Joyce
Washington Post Staff Writer
Wednesday, June 25, 2003; Page E03


Atlantic Coast Airlines pilots accepted a contract Monday night that would
cut pay but increase some benefits. Dulles-based Atlantic Coast, which runs
regional service for United and Delta airlines under the United Express and
Delta Connection brands, said the wage cuts were necessary to make Atlantic
Coast competitive. United, its biggest customer, is in Chapter 11
bankruptcy reorganization and has sought to reduce the costs of maintaining
a regional carrier. The pilots' contract, which decreases the salaries of
Atlantic Coast's 1,700 pilots by 7.5 percent, will go into effect after
Atlantic Coast and United Airlines renegotiate their relationship. Atlantic
Coast is paid a set fee by United and Delta for each departure, regardless
of how many tickets are sold or at what price.  United is paying Atlantic
Coast its 2002 rates until a new deal is made.  The regional carrier began
to cut costs by layoffs and other methods in April in response to United's
financial situation. About 85 percent of Atlantic Coast's business is with
United, with flights mostly out of Dulles International Airport and
Chicago's O'Hare International Airport. The five-year contract was ratified
to make Atlantic Coast more attractive and competitive to United, said
Christopher Thomas, an Atlantic Coast pilot and head of Atlantic Coast's
branch of the Air Line Pilots Association. In addition to cutting salaries,
a three-year agreement increases Family and Medical Leave Act benefits and
assistance for pilots on military leave.

"What this contract does is allow the pilot group and the company to be
better positioned. It buys us some job security and also helps position the
company and pilot group for future growth," Thomas said. Pilots with other
airlines, including Atlantic Coast's potential competitors for United's
business, have "significantly lower wages," he said. In April, Atlantic
Coast said it would cut 330 jobs and reduce the base pay of salaried
employees by as much as 10 percent. The company also reduced management
salaries and eliminated bonus programs. The new contract is "just another
step we're taking" to cut costs and stay in the race for contract bids with
United, Atlantic Coast spokesman Rick DeLisi said. "It brings our costs in
line with the expectations that United has expressed to us and puts us in
competition with the others in the United Express proposal process."  The
new contract "definitely puts ACA in a much more competitive position,"
DeLisi said.


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