US Airways Opens Dialogue With Pilots Union
In what could be a
positive sign for both parties, US Airways and its pilots union
began negotiations this week over less-restrictive and lower-paying
contracts to fly its new regional jets.
However, any cost-reducing concessions garnered from the pilots may
not be enough to assist the struggling airline's finances. US
Airways, the nation's seventh-largest airline, employs more than
7,300 in Pittsburgh and is the region's dominant carrier.
"It absolutely is a step in the right direction," Michael Boyd,
an Evergreen, (CO)-based airline industry analyst told the
Associated Press. "But let's remember, these jets are not a
panacea."
US Airways views the regional jets as an essential piece of a
plan that includes lowering its costs to better compete with
discount carriers, such as Southwest Airlines and JetBlue. Those
low-cost airlines have been rapidly encroaching on US Airways' key
routes along the East Coast.
US Airways has said it expects to receive the first of 85
regional jets it ordered from Brazil-based aircraft manufacturer,
Embraer, later this month. The more efficient, 70-seat airplanes
will go a long way toward improving US Airways' bottom line,
according to the airline, which was scheduled to report its 2003
year-end financial report on Feb. 6.
Mr. Boyd, president of
The Boyd Group Inc., said US Airways needs at least another 150
regional jets to make its new business plan effective. In the
meantime, ALPA, in a posting on a US Airways pilots' Web site, said
its Master Executive Council has agreed to pay rates for pilots
that would fly regional jets for MidAtlantic Airways -- US Airways'
planned regional airline -- that are comparable to those paid at
American Eagle, American Airlines' commuter division.
The union says those rates are significantly lower than those
paid to US Airways' mainline pilots and are among the lowest in the
regional airline industry. A mainline captain usually makes from
$100 to $200 an hour flying US Airways' larger jets. A MidAtlantic
captain likely would get from $50 to $60 an hour, according to ALPA
spokesman Jack Stephan. In addition, the MEC -- ALPA's governing
body -- said it will negotiate contract modifications regarding who
will fly the new regional jets, the work rules that will pertain to
those pilots and which US Airways' affiliated carriers will be
responsible for the bulk of those flights.
Resolving those issues quickly could help ensure the planned
launch of MidAtlantic next month. It was unclear how long
negotiations might take or when a tentative agreement would be
forwarded to union members for ratification.
ALPA's 12-member Master Executive Council said in the Web
posting that it decided to open the negotiations "because of
serious concerns" regarding regional jet financing "and other
financial issues faced by the company."
The decision comes as
US Airways is working to meet a number of financial milestones
required under the nearly $1 billion in federal loan guarantees it
was granted last year by the Air Transportation Stabilization Board
to help the airline emerge from Chapter 11 bankruptcy protection
last March. It also follows months of tension between the
pilots and the airline's top executives. In December, ALPA's
leadership called for US Airways president and CEO David Siegel to
step down.
ALPA previously agreed to more than $560 million in annual wage
and benefit concessions. The International Association of
Machinists also agreed to concessions totaling $205 million, while
the Association of Flight Attendants agreed to more than $100
million.
US Airways spokesman David Castelveter said the airline will
approach other labor unions for help with additional cost
reductions, but declined to assign a dollar figure to what the
airline will seek.
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