Sat, Sep 11, 2004
Last-ditch proposal for wage concessions from pilots may not
produce deal
US Airways may be just days away from filing for bankruptcy
protection if a last ditch proposal for concessions from its pilots
does not result in a deal.
The spokesperson for the US Airways chapter of ALPA, Jack
Stephan, said that the pilot union is discussing the proposal, but
would not disclose details. "I have no idea what (the pilots
executive committee) will do with the proposal," Stephan told
Reuters. Earlier this week the union rejected a plan for $300
million in concessions.
If the proposal is not
accepted, the consensus appears to be that the airline will have no
choice but to file for bankruptcy no later than Sunday, September
12. The New York Times has reported that the filing, which would
take the airline into bankruptcy court for the second time in two
years, is imminent. However, the outcome may not be as positive as
it was when the airline emerged from the process the first time
around.
Both the Times and the Wall Street Journal reported Friday that
the company has no collateral available to put together an interim
financing arrangement. Given this situation, the company would be
forced to use cash reserves, which would make it much harder to
reorganize. If that were to happen, the outcome would be Chapter 7,
and liquidation of the airline.
According to the Times, US Airways spokesperson Christopher
Chiames has said a final decision on the filing has not been made,
but he added, "All along in this process, we've acknowledged that a
bankruptcy filing might be necessary."
The pilots union was scheduled to hold an emergency meeting on
Friday at the Pittsburgh airport, but whether or not they will
accept the proposal is anyone's guess. The airline has said that if
it doesn't have an $800 million package of concessions from all its
unions this month, bankruptcy would be almost inevitable.
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