Friday, October 22, 2004

US Airways' pilots union OKs contract - and 18% pay cut

By Matthew Barakat
The Associated Press

ARLINGTON, Va. - US Airways' pilots union ratified a new labor contract Thursday that the airline says is a critical step to a successful emergence from bankruptcy, with pilots accepting an 18 percent pay cut on average and other changes that will cut costs by $300 million a year.

The bankrupt airline has been hopeful that a ratified deal with the pilots will give it momentum as it seeks concessions from its three other major unions: its machinists, flight attendants and passenger-service workers. US Airways, a unit of US Airways Group Inc., says it needs about $950 million in annual cost cuts from all its unions to become financially viable.

The Air Line Pilots Association said that 1,690 pilots, or 58 percent, voted in favor of the contract, while 1,236 voted against. Eighty-nine percent of the union's 3,291 eligible members cast ballots.

The ratification means that US Airways pilots will not face temporary pay cuts of 21 percent that a bankruptcy judge imposed last week on unions that have not agreed to new, long-term contracts.

The airline issued a statement Thursday saying that "pilots have demonstrated their leadership in working with us" on "the very difficult issues that will soon confront virtually every one of our legacy competitors as well."

The ratification vote follows months of contentious negotiations that exposed deep divisions within the pilots union.

The pilots' deal extends through 2009. Along with the 18 percent pay cut, pilots will have to fly more hours each month, likely resulting in additional furloughs. Nearly 1,900 US Airways pilots have been furloughed over the past three years as the airline has endured two trips into bankruptcy.

The average US Airways pilot makes $155,000, according to the airline. An 18.25 percent pay cut would reduce that to $126,713. For some pilots, though, the cut could be even greater.

If the new work rules result in some captains being reduced to first officers, those persons' pay might drop from $155,000 to less than $90,000, depending on certain factors.

The deal also changes work rules and cuts benefits.

The union estimates that pilots have now collectively forgone $7 billion in wages and benefits, including concessions made in the first bankruptcy in 2002 and up through 2009.

Fred Freshwater, a pilots' representative from Pittsburgh, who opposed the deal, said he thinks many pilots will quit when they realize the depth of the concessions.

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