Cost-cutting talks between US Airways and its machinist union broke off yesterday after the airline said the union's proposed money-saving ideas were not enough to help the carrier avoid bankruptcy.
Union leaders met with airline officials at the carrier's Arlington headquarters to outline operational changes that union officials said could save the carrier about $100 million.
To avoid its second trip into bankruptcy court in two years, US Airways has said it must cut about $1.5 billion in annual costs by the end of September. The airline wants workers to contribute $800 million in pay and benefit cuts.
US Airways mechanics have rejected additional concession talks, but union leaders said they would propose operational changes aimed at helping the carrier reduce its costs. Among the union's suggestions were a reduction in the outsourcing of mechanics' work and a sharp cut in the number of supervisors.
US Airways spokesman David Castelveter said the proposals failed to address the needs of the airline.
"We told them that it is time to immediately begin negotiations with the company and that the time for avoiding the real issues which confront us is over," he said.
A spokesman for the mechanics union declined to comment on the meeting.
Meanwhile, US Airways executives yesterday continued to negotiate on concessions with leaders of the airline's pilots union.
US Airways is hoping the pilot leaders will agree to take the latest proposal to the group's rank-and-file for a vote. The carrier is seeking $295 million a year in concessions from its pilots.
US Airways continues to trim its costs to sustain its operations. The airline has a $110 million pension payment due Sept. 15. Later this month, it must demonstrate to the Air Transportation Stabilization Board that it has reduced its costs enough to meet requirements of a $900 million loan guarantee granted by the federal panel.
US Airways has sought concessions from workers three times in the past three years. During the airline's bankruptcy reorganization last year, employees gave up $1.2 billion a year in pay and benefits.
Meanwhile, US Airways is finalizing its plans to reduce "some" positions within its sales and marketing department as part of its overall restructuring. Also, more than 150 management positions that have become vacant this year remain unfilled, said Christopher L. Chiames, US Airways senior vice president for corporate affairs.
Like most financially struggling carriers, US Airways is trying increase the number of travelers who purchase their tickets from its Web site to reduce distribution costs.