"Pilots Union: US Airways Talks Break Down"

Monday, August 23, 2004

Pilots Union: US Airways Talks Break Down 
The Associated Press


Talks between US Airways Group Inc. and the union representing pilots have
broken down, the Air Line Pilots Association said Monday. 

The announcement came days after union leaders said a new labor agreement
could be struck soon. 

"We are disappointed that the company's latest proposal failed to respond in
any substantive way to our proposal of August 21," Jack Stephan, a spokesman
for the US Airways pilots, said in a statement. The talks broke down Sunday,
the statement said. 

"We negotiated throughout the weekend and have provided (the pilots' union)
with our response to their proposal," US Airways said in a statement. The
statement said the air carrier expected to hear from the pilots. 

US Airways has said that new labor deals with unions are necessary to avoid
a return to bankruptcy court and possible liquidation. The airline has
warned that bankruptcy looms if deals are not reached next by at least Sept.
30. 

A deal with the pilots would be the first significant step in US Airways'
plans to cut costs by $1.5 billion a year, including cutting labor costs by
$800 million. 

The airline has sought $295 million a year in concessions from pilots. 

Generally, the pilots have been most receptive to renegotiating their
contract. The pilots were also first to reach a new deal during US Airways'
first trip into bankruptcy in 2002, when labor groups collectively made more
than $1 billion a year in concessions. 

A study commissioned by the pilots found earlier this month that a
bankruptcy filing loomed as soon as mid-September unless management could
implement reforms and cost savings. 

US Airways is also seeking concessions from its flight attendants,
machinists, and from the Communications Workers of America, which represents
reservations agents and gate workers. 

The pilots announced the breakdown in talks shortly before markets closed.
Shares of US Airways fell a penny to close at $1.91 on the Nasdaq Stock
Market. In after-hours trading they fell another 21 cents, or 11 percent.


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