=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/10/01/f= inancial0848EDT0030.DTL --------------------------------------------------------------------- Friday, October 1, 2004 (AP) US Airways, pilots union reach tentative deal PAUL NOWELL, AP Business Writer (10-01) 12:19 PDT CHARLOTTE, N.C. (AP) -- Leaders of the pilots' union at bankrupt US Airways were considering Friday whether to forward to members a proposed contract renegotiation that includes an average pay cut of more than 18 percent. The nation's seventh largest airline said the agreement with a negotiati= ng committee for the pilots' union would save the struggling carrier $300 million annually -- nearly one-third of the cost cuts that US Airways says it needs to remain viable. A spokesman for the Air Line Pilots Association valued the concessions at $1.8 billion over nine years. At midafternoon, union negotiators were meeting with between 70 and 80 pilots who make up the group's management executive council at a hotel in Charlotte, where US Airways has its largest hub. ALPA represents the airline's more than 3,000 pilots. Jack Stephen, a union spokesman, said this would be the third round of concessions pilots have made to the company since 2002. "It brings the total amount these pilots have given back to around $7 billion," Stephen said. Under the proposal, Stephen said, pay cuts would average 18.25 percent. Salaries for captains now range from $120,000 to $150,000 per year, while first officers make between $75,000 and $100,000 annually, he said. Bruce R. Lakefield, president of US Airways, issued a statement praising the tentative agreement that was reached early Friday. "This is a major step forward for our company, its employees, customers and all other stakeholders," Lakefield said. US Airways chairman David Bronner said the $300 million in annual savings was a "good number from the pilots" that should be enough to avoid liquidation if combined with cuts from other labor groups and gains in productivity. "Originally we were after a little less than that," Bronner said in Montgomery, Ala. Bronner is CEO of the state of Alabama's pension system, which has a $240 million stake in the airline. Airline officials have said a cost-cutting agreement with pilots is absolutely necessary if US Airways is to continue operating while in bankruptcy. The company warned in a bankruptcy court filing on Sept. 24 that it could be forced to liquidate by February if the court did not impose a temporary 23 percent pay cut on union workers. An Oct. 7 hearing is scheduled on the issue. A footnote on the bankruptcy court filing indicated that the airline wou= ld seek $950 million in permanent annual cost reductions from its unions. Before it filed for bankruptcy on Sept. 12, the company had sought $800 million a year in cost cuts. Without the reductions, the airline said its cash reserves will dip so l= ow by February that its lenders will likely withdraw the financing that has allowed the company to operate while in bankruptcy. US Airways has said it needs a cost structure in line with those at low-fare carriers such as JetBlue Airways Corp. and America West Holdings Corp. if it is to successfully compete. US Airways employs 28,000 workers in its mainline operations and 34,000 overall. About 84 percent of its employees are covered by union labor agreements, according to the company's annual report. According to the airline, dispatchers have already ratified a cost-saving deal, while the company has tentative agreements with flight crew training instructors and flight simulator engineers. Still in negotiations are US Airways' flight attendants, machinists and members of the Communications Workers of America. On the Net: www.usairways.com www.usairwayspilots.org ---------------------------------------------------------------------- Copyright 2004 AP