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STEVE HUETTELThe troubled airline's most recent offer includes a 16.5 percent pay cut and added flying time.
US Airways and its pilots said Friday they are resuming talks on a cost-cutting contract to help the carrier avoid another trip to bankruptcy court as soon as next month.
The airline wants a deal with its pilots so other labor groups might follow suit with wage and benefit concessions before a number of financial deadlines hit in September. Prospects dimmed Sunday when negotiations with the pilots broke down.
After three days of meetings, pilot union leaders said late Friday they would go back to the bargaining table, perhaps that evening. They decided against sending the company's proposal to members for a vote or simply taking no action.
In separate written statements, the Air Line Pilots Association and US Airways said they were committed to reaching a deal that would return the airline to financial stability. But they also took pointed jabs at each other.
"We are hopeful that management will reconsider its previous strategy of piling on additional, unnecessary demands," said union spokesman Jack Stephan. "We look forward to bringing back an agreement ... that adequately addresses elements of (US Airways') Transformation Plan, without a total disregard for contractual protections."
US Airways made clear that any agreement would have to provide the $295-million in cost savings the airline says it needs from pilots. The company's most recent offer includes a 16.5 percent pay cut, elimination of a recently created pension plan and added flying time.
"We will work through the weekend if necessary to resolve the remaining differences," said airline spokesman David Castelveter. "But we must emphasize that delay and denial are not in anyone's best interests."
US Airways, the nation's seventh-largest airline and No. 3 at Tampa International Airport, is struggling to overcome problems facing most traditional carriers: pressure from low-cost competitors, declining ticket revenues and sky-high fuel prices.
But its weak financial condition and industry-leading costs make US Airways one of the more vulnerable.
US Airways is trying to change itself into a discounter that can go up against Southwest and JetBlue in big markets and serve other cities with small jets.
The airline is seeking to cut $1.5-billion in annual costs, about $800-million through concessions from labor.
Getting a deal from pilots, the highest paid and strongest labor group, is the critical first step. Time is running short, US Airways executives insist.
On Sept. 15, the company must make a $110-million payment to its flight attendants' and machinists' pension plans - a bill that could be postponed if US Airways files for bankruptcy first.
On Sept. 30, the airline must hit financial benchmarks set as conditions of $785-million in loan guarantees granted by the federal Air Transportation Stabilization Board. US Airways says it could fail to meet the requirements and default on the loan guarantees. But chairman David Bronner said the board might be more flexible in negotiating new terms if new employee contracts are in place.
Also, financing deals for a fleet of new small jets with General Electric Capital Corp. and two manufacturers of the jets expire Sept. 30.
Negotiations with unions representing flight attendants and passenger service workers aren't as far along as the pilots union talks. The union for mechanics, ramp workers, aircraft cleaners and stock clerks will meet with the airline Monday but hasn't agreed to discuss contract changes.
Last week Bronner said that without concessions from all labor groups, US Airways faces a return to bankruptcy as early as next month and might not come back out.
Bronner runs Retirement Systems of Alabama, which paid $240-million for a controlling stake in US Airways during its Chapter 11 bankruptcy reorganization that ended in early 2003. The retirement fund won't put more money into the airline unless labor costs come down, he said.
Airline analysts say that if Bronner won't bail US Airways out of another bankruptcy, it's unlikely other investors will take the chance.
In August 2002, US Airways became the first major airline to file for bankruptcy protection in the wake of the Sept. 11 terrorist attacks.
The airline managed to gain $1.9-billion in annual savings and reduce debt and capital lease obligations by $2.6-billion. More than half the recurring savings came through new contracts with labor.
Pilots took the biggest hit. Besides cutting pay and benefits, US Airways eliminated the pilots' underfunded pension plan and negotiated a far less generous deal.
Steve Huettel can be reached at 813 226-3384 or huettel@sptimes.com