U.S. Airways unions ask judge to reconsider interim labor relief

By Jeff Pines

Washington, Oct. 26 - Two U.S. Airways Inc. unions asked the judge in the bankrupt airline's Chapter 11 case to reconsider a recent temporary 21% cut in pay and reductions in benefits to its members.

The International Association of Machinists and Aerospace Workers and the Association of Flight Attendants, AFL-CIO, each filed requests to reconsider.

The IAM, which represents about 9,100 U.S. Airways employees, repeated its position that interim relief is not necessary at this point in time but may be necessary early next year. Until then, it said, the Arlington, Va.-based airline has enough cash on hand and the airline "admitted this in their motion and at trial."

Both unions argued that interim relief is supposed to be "minimum necessary to keep the debtor afloat," and that the relief given exceeds that minimum.

The AFA said the pay cut is excessive because it ignores the pension contributions the airline decided not to make without court permission. By not making the pension payments to the AFA's pension, U.S. Airways is already saving $3.9 million per month, or a total of $15.6 million for the period of the interim relief. U.S. Airways said it needed the flight attendants to give the airline $5.4 million, the union said.

Since the hearing, the Air Line Pilots Association ratified permanent changes to its pact with U.S. Airways. The agreement carries a lower pay cut of 18%, but increased productivity and changes in benefits for pilots.

That the pilots took an 18% pay cut and the workers represented by the Transport Workers Union took cuts ranging from 5% to 11.8% shows the IAM's members do not need to take a 21% reduction in pay, the union said.

A further concern is the order temporarily allowing U.S. Airways to outsource heavy maintenance. The union is concerned that once the work is outsourced it will eventually outsource permanently.

A Nov. 18 hearing is scheduled.

In related news, U.S. Airways chief financial officer David Davis resigned to take a position with Kraton Polymers LLC in Houston. He will be replaced by Ronald Stanley, who has been chairman of the board's audit committee since May 2004.

U.S. Airways filed for bankruptcy on Sept. 10 in the U.S. Bankruptcy Court for the Eastern District of Virginia. Its Chapter 11 case number is 04-13819.

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