January 7, 2005
US Airways won a little more maneuvering room as a bankruptcy court judge canceled its labor contracts covering mechanics and ramp workers if they don't agree to the company's giveback proposals. The judge also gave the carrier permissions to jettison underfunded pension plans covering 53,000 workers.
Judge Stephen S. Mitchell delayed implementation of his ruling covering the machinists union contract until Jan. 22, when union members are scheduled to vote on US Air's proposal. If the members reject it, the company can then cancel its contract with the union.
Mitchell conceded it is a bitter pill for the machinists, who have already undergone numerous wage cuts and work rule changes.
"But the question is, will there be any jobs at all at the end of the day?" Mitchell asked.
Union leaders said they would not disrupt US Airways' operations in the run-up to the vote. A Christmas Week slowdown paralyzed the airline and disrupted travel for thousands of passengers.
Earlier, the airline's flight attendants, represented by the Association of Flight Attendants, has ratified a $94 million annual cut in their contract, in order to provide the carrier critical cash. The agreement passed by a 64 percent margin, and will now be presented to the bankruptcy court for approval.
"This was an enormously important vote at a critical time for our company, and we welcome our flight attendants continued participation in US Airways' transformation," said Bruce Ashby, US Airways senior vice president of alliances and president of US Airways Express, who headed negotiations for the company. "We now need to reach agreements with our machinists, fleet service workers and maintenance training specialists represented by the International Association of Machinists (IAM)."
Additionally, US Airways reached an agreement with both the committee representing its current retirees, as well as the IAM for its retirees. As a result, retirees will retain an agreed upon level of medical coverage. Details will be filed with the U.S. bankruptcy court, which must approve the agreement.
