Flight Attendants Approve New Contract

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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

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