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US Airways' Talks With Pilots Union Break Down

Concessions Sought To Avert Bankruptcy

By Keith L. Alexander
Washington Post Staff Writer
Tuesday, August 24, 2004; Page E01

US Airways' pilots union announced that negotiations on pay and benefit cuts broke down yesterday, prompting the carrier's executives to ask that their latest proposal be taken directly to the union's leadership for a vote.

The collapse in talks underscores the friction between management and workers as US Airways Group Inc. seeks to secure $800 million in cuts by the end of September to stave off its second bankruptcy filing in two years. But bringing the proposal to the union's executive council is likely to accelerate the contract process, said Standard & Poor's analyst Philip Baggaley.

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"The move should bring the negotiations closer to a conclusion one way or another," Baggaley said.

The pilots union, which said negotiations broke off over details of the proposal, was the first employee group to agree to new talks and had seemed poised to become the first to reach an agreement.

"Since the beginning of these talks, we have witnessed a disturbing trend by the company to seemingly dismiss several significant proposals from our pilot negotiators," said Jack Stephan, a spokesman for the Air Line Pilots Association.

No future talks have been scheduled. But the executives' request for a vote on the proposal will be addressed at a union meeting tomorrow. Union leaders can vote either to reject the proposal or allow its members to vote on it.

The labor maneuvers came as the airline announced yesterday it plans to fly to 13 cities in the Caribbean and Latin America from its soon-t0-be-created mini-hub at Fort Lauderdale-Hollywood International Airport.

The 45 low-fare flights begin in February 2005 to such cities as Guatemala City, Panama City, San Salvador and Kingston, Jamaica. Passengers can pick up the flights at several airports such as Baltimore-Washington International, Boston's Logan and New York's LaGuardia and connect through Fort Lauderdale. The airline's new Go Fares are about 60 percent lower than the regular fares.

US Airways will boost the number of its daily flights out of the new Fort Lauderdale hub to 60 from 15, lifting the airline for now from the fifth-biggest carrier at the airport to the No. 1 position. Delta Air Lines currently has the largest presence at the airport.

Transforming Fort Lauderdale into a connecting airport presents some challenges for the airline as well as for airport and government officials.

The airport has been primarily an originating and destination airport, said its director, Thomas R. Jargiello. Now it has to increase the number of security screeners and immigration officials to handle the increased number of international flights.

Airport officials will accelerate a $55 million expansion program to get the new customs and inspections systems in place a year earlier than originally planned, Jargiello said.


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