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Thu, Dec 18, 2003

US Airways Pilots Demand CEO's Ouster

Board Says No Way

US Airways pilots want the airline's president, David Siegel, thrown out on his ear. The union also wants the company's CFO bounced. Read it as a sign that negotiations over US Airways' renewed demands for wage concessions aren't what you'd describe as "smooth" or "friendly."

US Airways workers already kicked in $1.2 billion in concessions to help bring the carrier out of bankruptcy. But now, the airline is trying to compete with Southwest, which just started service to US Airways' most profitable hub in Philadelphia (PA). When Southwest made that announcement back in May, Siegel (below, right) warned employees that more cuts were needed so the airline could remain competitive.

"We have seen absolutely no accountability from management for the tremendous investment we have already made, yet we keep hearing their tired refrain that they need labor costs like those of Southwest Airlines," said Bill Pollock, chairman of US Airways' pilots group and US Airways board member. "The concession window is closed for this management team."

In spite of everything Siegel and company have done to drastically cut costs, US Airways continued to lose $1 million a day in the third quarter.

Last month, US Airways chairman David Bronner told the Washington Post that even more cuts were on the way. Bronner specifically mentioned the company's many hub operations. "I think US Airways has too many hubs and its hubs are too close together," he said. Besides Philadelphia, US Airways has hubs in Pittsburgh (PA) and Charlotte (NC).

As for demands that Siegel and CFO Neal Cohen be fired, Bronner said it's just not going to happen. "The US Airways board of directors has complete confidence in the management team, and Dave Siegel in particular." He also said the ALPA's demand for blood "does nothing to address the bigger issue of how we complete our restructuring and become a successful company and ignores the fact that shareholders rely on management and union leaders to work together to solve problems, rather than looking for someone to blame."

FMI: www.usairways.com, www.alpa.org

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