US AIRWAYS Airline says concessions from union are essential
A study has convinced the union that the airline's finances are dire.
PITTSBURGH (AP) -- An investment banker for US Airways' pilots union said the airline's finances could collapse within a month, prompting the union to accelerate contract concession talks.
"As a result of various financial pressures, it is highly likely the company will seek bankruptcy protection no later than mid-September," said the report prepared by Glanzer & amp; Co.
The airline, which emerged from Chapter 11 protection in March 2003, previously had said it might return to bankruptcy if its various employee unions don't approve $800 million in contract concessions before then. The airline said the contract concessions are crucial to its goals to cut $1.5 billion in costs and said it could default on a federally guaranteed $900 million loan if unions don't ratify the concessions by then.
Before the report released Thursday, the pilots union and others expressed doubt that the airline's finances were that dire, especially after Arlington, Va.-based US Airways Group Inc. reported a $34 million profit in its last quarter.
The Air Line Pilots Association on Thursday posted the Glanzer report on its pilots-only Web site, and union negotiators told members they'll meet with the airline Friday and every day next week about the $295 million in wage and benefit cuts the airline wants from its pilots.
Representatives of other US Airways unions could not be reached immediately Thursday night after business hours.
"We concur with the conclusion that it is in the best interests of the company and employees that we quickly reach consensual agreements with all of our labor unions so that we can achieve the necessary cost reductions and can fully implement our transformation plan," the airline said in a statement.
The company hopes to save money through changes in its flight patterns -- including cutting hub service at Pittsburgh International Airport -- changes in work rules and the wage and benefit concessions.