NYTimes.com Article: US Air Pilots Vote to Take 18Pay Cuts

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US Air Pilots Vote to Take 18Pay Cuts

October 22, 2004
 By MICHELINE MAYNARD





Pilots at US Airways have voted in favor of giving $300
million in annual wage and benefit concessions to the
struggling airline, becoming the first major labor group to
accept permanent cuts, the union representing pilots said
yesterday.

US Airways made its second bankruptcy protection filing in
two years on Sept. 12. Last week, a Federal Bankruptcy
Court in Alexandria, Va., granted the airline's bid for
emergency pay cuts of 21 percent, and other benefit
reductions, for its union workers. Without the cuts, US
Airways said, it could cease operating by mid-February.

Pilots at other airlines are facing similar efforts to
reduce pay and benefits. Delta Air Lines, which is trying
to avoid joining US Airways in reorganization, is pushing
its pilots for $1 billion in wage and benefit cuts.

United Airlines, which has been in bankruptcy protection
since December 2002, said last week that it would soon
outline plans to nullify its labor contracts and replace
them with less-expensive pacts. Last year, United's parent,
the UAL Corporation, obtained concessions worth $2.5
billion a year from its unions.

US Airways pilots voted 58 percent in favor of the
contract, a wider margin than some analysts had expected.
The vote means members of the Air Line Pilots Association,
which represents 3,200 active and laid-off US Airways
pilots, are exempt from the emergency cuts.

Instead, their pay will be cut 18 percent a year, a total
of $1.8 billion in savings for the airline through 2010.
The new contract will also sharply reduce US Airways'
contribution to the pilots' retirement plan, eliminate
health care benefits for pilots after they retire, and
increase the number of hours that pilots must fly each
month.

Approval came despite the rejection of the contract by
pilots in Pittsburgh and Philadelphia, two of US Airways'
three hubs, the other being Charlotte, N.C.

In both Pittsburgh and Philadelphia, 52 percent of the
pilots voted against the contract. Leaders of those pilots
had blocked an effort in September to send an earlier
proposal to a vote.

They were especially angered by the reduction in retirement
benefits, which had already been cut sharply in the
airline's first bankruptcy filing.

In recent days, the Pittsburgh and Philadelphia pilot
leaders stepped up efforts against the tentative contract,
arguing that pilots could get a better deal if negotiations
resumed.

But other officials of the union disagreed. They pointed
out that US Airways had held back on starting the emergency
pay cuts while the pilots voted.

Had the contract been rejected, the emergency cuts would
have been applied immediately, retroactive to Oct. 15. And,
these leaders maintained, it was likely that any subsequent
contract would be worse than the one presented to pilots
for a vote.

Pilots based in New York, Boston, Washington and Charlotte
favored the contract, the union said, enough to win its
approval.

"While the burden that the US Airways pilots have agreed to
shoulder is immense, this vote signifies that our pilots
acknowledge the pain and sacrifice that is required to
address the reality of our situation," said Bill Pollock, a
US Airways captain who is chairman of the union's master
executive council.

In a statement, the airline said: "Our pilots have
demonstrated their leadership in working with us as we
transform US Airways into a successful and competitive
airline. We appreciate their thoughtful and careful
consideration of the very difficult issues that will soon
confront virtually every one of our legacy competitors as
well."

US Airways executives have repeatedly said they hope to
reach agreements with other unions representing flight
attendants, mechanics and reservations agents. Analysts
said the approval by the pilots could lead to movement in
contract negotiations.

But the urgency of getting new contracts was diminished by
the judge's decision to impose emergency cuts for the next
four months, said Robert W. Mann Jr., an industry
consultant in Port Washington, N.Y.

"What's the company's incentive to deal?" Mr. Mann said. If
the airline faced the prospect of getting less from unions
than the emergency cuts generated, "what might be better
for employees would be worse for the company."

http://www.nytimes.com/2004/10/22/business/22air.html?ex=1099449321&ei=1&en=d42bdfcba1487ad1


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