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US Airways, Flight Attendants Closer to Deal

By Keith L. Alexander
Washington Post Staff Writer
Friday, December 17, 2004; Page E01

The lead negotiators for US Airways flight attendants reached a tentative agreement on a new contract that will save the carrier about $94 million a year, officials from both sides said yesterday.

The group's leaders and its 5,400 members must approve the agreement, which calls for a 9 percent cut in workers' pay and benefits. Further details were not released.

The flight attendants' agreement leaves the machinists union as the sole holdout. An agreement with the machinists would bring the airline close to achieving the $1 billion in savings the company said it needs from workers to emerge from bankruptcy protection. Both the machinists and the flight attendants have staunchly opposed the airline's demand for pay and benefit cuts.

US Airways wants about $255 million in annual savings from the machinists and fleet service workers represented by the machinist union. Joseph Tiberi, a spokesmanfor the machinist union, confirmed that both sides continue to meet.

Teddy Xidas, president-elect of US Airways' flight attendants union, said Thursday's agreement was "the best deal we could get in this . . . horrible situation."

US Airways has asked the bankruptcy court to scrap its contracts with workers who have refused to agree on concessions. Without the concessions, US Airways said it could be forced to begin liquidation by mid-January. The flight attendants voted last month to strike if the airline terminated its contract before both sides reached an agreement.

The tentative agreement with flight attendants comes as the hearings on US Airways' contract request enter their final stage at U.S. Bankruptcy Court in Alexandria. Today, Bankruptcy Court Judge Stephen S. Mitchell is expected to begin hearing concluding arguments from airline attorneys and those representing workers, retirees and creditors. If more time is needed, Mitchell will schedule hearings after the New Year.

Bruce Ashby, a US Airways senior vice president, praised the flight attendants' decision. "US Airways' success depends on the cooperation of all employees, and with this agreement, we are much closer to becoming a stronger and more competitive airline," he said in a statement.

Also yesterday, the bankruptcy court granted US Airways permission to proceed with its latest aircraft and engine financing deal with GE Capital Aviation Services and GE Engine Services. The agreement provides the airline with $140 million in interim cash and the deferral of aircraft debt and lease payments due during the next six months. Under the terms of that agreement, the airline must emerge from bankruptcy by June 30.

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