US Airways Gets Nod From Remaining Labor Groups

The last of US Airways' labor unions last night announced support for the bankrupt carrier's restructuring plans after members of both the International Association of Machinists District 141-M and the Communications Workers of America ratified the proposals. With all unions now onboard, US Airways will seek final approval from the Air Transportation Stabilization Board for $900 million in federal loan guarantees. ATSB in July granted conditional approval.

"The ratification of this last remaining employee agreement provides us with tremendous momentum to secure our financing, complete our restructuring plan and emerge from bankruptcy early in 2003," said Jerry Glass, US Airways senior vice president of employee relations, after IAM District 141-M announced 57 percent of voting members supported the plan. IAM in August rejected the deal, but opted to vote again after US Airways signaled its intention to invalidate labor contracts, if necessary, in bankruptcy court.

Earlier in the evening, CWA said its members--reservations and airport ticketing and gate workers--ratified its portion of the restructuring plan by a 75 percent margin.

However, final ATSB approval is not certain and may have other strings attached. The government likely will require US Airways to provide other collateral, but the carrier would not discuss specifics.

ATSB last December required America West Airlines to provide the government with warrants to purchase up to a third of the company's non-voting common stock in exchange for federally backed loan guarantees.

Meanwhile, United Airlines extended until tomorrow its self-imposed deadline for reaching cost concessions with various labor groups. The carrier originally planned to finalize new labor agreements by Monday and then resubmit its application to ATSB for $1.8 billion in federal loan guarantees, but at the request of the coalition of the carrier's largest unions, management agreed to push back. The extension widely was expected once the company named Glenn Tilton its new CEO on Labor Day.

United has said it will enter bankruptcy reorganization if it cannot significantly cut costs and infuse fresh capital.