US Airways Sets Tomorrow Deadline For Labor Deals

In a special employee bulletin, US Airways CEO Bruce Lakefield late yesterday said the carrier would ask the judge overseeing its bankruptcy case to authorize new labor contracts unless major employee unions agree to more concessions by tomorrow. "If we were to do nothing during the traditionally slow fall and winter months, the drain on our cash reserves would jeopardize the company's future and everyone's job," he said.

Lakefield called the decision "difficult but necessary," and stressed the need to maintain a minimum cash balance to continue operations and preserve the confidence of consumers and financial partners.

Aiming to avoid a Section 1113 filing-which would reject collective bargaining agreements-and minimize court intervention in its labor relations, Lakefield said US Airways sent to its largest unions a "proposal for interim relief from our existing contracts, allowing us to implement immediate cost reductions, including pay cuts." Those unions represent pilots, flight attendants and mechanics. Earlier in the day, the airline announced a new, tentative deal with the Transport Workers Union, representing flight dispatchers. Also earlier yesterday, leadership at the Air Line Pilots Association said it directed its negotiators to resume contract talks with management.

Lakefield reminded employees that US Airways' potential request to the bankruptcy court first would be heard at a separately scheduled hearing before contract changes can be forced on labor groups, and that the company would continue negotiating with each union until that hearing.

He added that "we are not seeing anything we did not expect" during the early stages of its second bankruptcy in two years. "We are heartened by the great operation of the airline and the support that key corporate accounts and customers are showing," Lakefield said. "Therefore, we do not want to let a cloud of skepticism hang over the company."