Flight Attendants Approve New Contract Cuts Pay By Nearly 10 Percent Will Save US Airways $94M A Year Jan 5, 2005 5:50 pm US/Eastern ARLINGTON, VA (AP) Flight attendants at bankrupt US Airways approved a ne= w labor contract Wednesday that cuts their pay by nearly 10 percent, leav= ing only one union that has refused to accept the cuts the airline says a= re necessary to avoid imminent liquidation. The Association of Flight Attendants, which represents about 5,000 worker= s at the airline, approved the contract with 64 percent of the vote, acco= rding to a union spokeswoman. The new contract cuts pay immediately by 8.4 to 9 percent, with pay raise= s of 1 percent to 2 percent beginning in 2007 and extending through 2011.= Tougher work rules will also be implemented. The airline estimates that the new contract will allow it to save $94 mil= lion a year, part of nearly $1 billion the airline=97a subsidiary of US A= irways Group Inc.=97is trying to squeeze from its 28,000 workers. Flight attendants had been working under a temporary 21 percent pay cut i= mposed by a bankruptcy judge to help the airline conserve cash while in b= ankruptcy. Even though the new contract includes a much less severe pay cut than the= 21 percent cut imposed by the judge, rank-and-file approval of the new d= eal had not been a foregone conclusion. While other unions had recommende= d approval of their respective contracts, the flight attendants=92 leader= s had adopted a neutral stance in sending the contract out for a vote. Worker discontent became evident over the Christmas holiday, when airline= management blamed excessive sick calls by flight attendants and baggage = handlers for the cancellation of hundreds of flights that left travelers = stranded. Unions responded that sick calls were no higher than average, and blamed = the =93operational meltdown=94 on razor-thin staffing at the airline=92s = Philadelphia hub. As a result of Wednesday=92s vote, only the International Association of Machinists, which represents almost 8,500 mechanics, bagga= ge handlers and cleaning crews at the airline, has failed to negotiate a = new contract. The cuts sought by US Airways fall particularly hard on the machinists=92= union. One of the IAM bargaining units, representing mechanics, would li= kely lose more than half its jobs if US Airways is allowed to implement t= he furloughs it is seeking under a new contract. On Thursday, U.S. Bankruptcy Judge Stephen Mitchell is expected to rule o= n the airline=92s request to nullify the machinists=92 bargaining agreeme= nts, allowing US Airways to impose terms more favorable to management. US Airways management has said it would likely need to begin liquidating = assets if it does not receive relief from its labor contracts by mid-Janu= ary. The airline has been financing its operations while in bankruptcy un= der an agreement with the federal government=92s Air Transportation Stabi= lization Board, which lent the airline $900 million in March 2003, when U= S Airways emerged from its first trip into bankruptcy. That financing agreement with the ATSB expires on Jan. 15, and the airlin= e said it has little hope of obtaining an extension if it cannot demonstr= ate that it has sufficiently cut its labor costs. Even if the airline obtains new labor deals with all its unions, the airl= ine said that gives them only =93a fighting chance=94 at survival. It wou= ld still need to find an investor willing to provide hundreds of millions= of dollars to emerge from bankruptcy, and its projections suggest the ai= rline cannot turn any significant profit until at least 2008. (=A9 2005 The Associated Press. All Rights Reserved. This material may no= t be published, broadcast, = Roger EWROPS