US Airways shares surged yesterday as the Arlington airline and its mechanics union finalized details of a tentative contract agreement reached Tuesday night.
US Airways representatives would not comment on the agreement with the International Association of Machinists, which represents the airline's 7,500 mechanics and related workers.
But according to a source familiar with the settlement, the contract includes a 6 percent retroactive pay increase and stipulates that workers will receive an additional 4 percent increase at the end of the five-year contract. It was unclear yesterday how far back the increase would go. Previously, the union had requested that the increase go back to July 1997.
These wage increases would be in addition to any increases offered in July, when members of the Machinists union rejected an earlier tentative agreement, according to the source.
A Web site for members of the union said the agreement included signing bonuses, restrictions on part-time employees, pension increases for many members and other changes in work rules.
The union had sought a three-year contract, but the tentative contract is for five years, which would allow the company to spread out the cost of the increases in wages and benefits.
IAM members still must ratify the contract, but union officials were optimistic.
"Improvements were called for after the tentative agreement in July was turned down," said Rick Palmer, a union spokesman. "We think this new tentative agreement will be something that the membership will approve."
The stock price of US Airways Group Inc., holding company for the airline, rose 5 percent to close yesterday at $25.87 1/2.
"It was extremely important for US Airways management that they get a deal," said Tom Longman, an analyst with Arnhold & S. Bleichroeder Inc. in New York. He said the airline can't afford the ill will a mechanics strike would generate in the marketplace.
Meanwhile, the Association of Flight Attendants said yesterday that its 9,000 US Airways members would begin to prepare to strike if they do not reach agreement with the airline by Monday. The negotiations have dragged on for four years, but the union cannot legally walk out without authorization by the National Mediation Board, the federal regulator for railroad and airline labor relations.
But in the wake of the $45 million fine against American Airlines pilots earlier this year for staging a sickout, the attendants union may be reluctant to take such action.
On Oct. 12, the company is scheduled to begin two weeks of negotiations with the Communications Workers of America on a first contract with the airline's passenger reservation agents.