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Associated PressUS Airways hopes its other unions will follow with concessions so the company can emerge from bankruptcy.
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 its unions to become financially viable.
The Air Line Pilots Association said 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 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 "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. Union representatives in Pittsburgh and Philadelphia, who represent most US Airways pilots, had blocked a ratification vote in the weeks before last month's bankruptcy filing, saying the terms were so harsh that accepting them would have been "total capitulation."
Even after agreeing this month to allow a ratification vote, the Pittsburgh and Philadelphia reps had recommended a no vote, suggesting a better contract might be obtainable through bankruptcy.
In the voting, which ended Thursday, the Pittsburgh and Philadelphia units rejected the agreement, with 52 and 54 percent in opposition, respectively.
But the union's four smaller units - in Charlotte, N.C., Washington, Boston and New York - voted overwhelmingly for the contract, with support ranging from 68 to 84 percent in those cities.
"Clearly, this ratification shows that the pilots of US Airways understand why it was necessary to come to a consensual agreement with the company," said Bill Pollock, chairman of the US Airways Master Executive Council. "This agreement provides us with the means to survive, emerge from bankruptcy as a formidable competitor and ultimately prosper in even the most challenging of economic environments."
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, a cut could be even greater. If the new work rules result in some captains being reduced to first officers, their 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 pilots have 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 believes many pilots will quit when they realize the depth of the concessions.
"When the pilots find out what they voted for, when they actually find out how draconian this contract is, they'll vote with their feet," he said.
Other airlines . . .ATA: The discount airline on Thursday eliminated 220 positions in a cost-cutting move a day after it said a pay cut accepted by flight attendants would not save enough money to ease its cash flow problems. The airline did not specify what jobs would be cut, but said the reductions would not include pilots, flight attendants, ramp agents or reservations agents.
PRIMARIS: The little-known Las Vegas carrier with plans to provide low-cost service for business travelers has become the first U.S. airline to agree to buy Boeing Co.'s new 7E7 Dreamliner. Primaris will buy 20 Boeing 7E7-8 Dreamliners and 20 737-800s in a deal worth $3.8-billion at list prices, the airline and the aerospace giant said in a joint release Thursday. Primaris also agreed to take options for 25 737-800s and 15 7E7-8s.