US Airways Group Inc. plans to eliminate "hundreds" of management and nonunion jobs and cut top executives' pay by between 5 and 10 percent, the airline told its employees yesterday.
The job cuts will affect 10 percent of the airline's 3,700 salaried and nonunion workers.
The nation's seventh-largest airline also plans to leave vacant 137 management positions.
The cuts in executive salaries and benefits will bring them more in line with management compensation at low-cost carriers America West Holdings Corp. and JetBlue Airways Corp., the airline said.
Many of the cuts will be implemented by the end of the month.
US Airways president and chief executive Bruce R. Lakefield will not participate in the reductions because his compensation package is much smaller than that of his predecessors. His $425,000 salary is about $200,000 less than that of former chief executive David N. Siegel. Unlike previous US Airways chief executives, he has agreed not to accept a bonus or "golden parachute."
The Arlington airline, which last month filed for protection from its creditors for the second time in two years, said the cuts are aimed at helping trim about $45 million from its $201 million management payroll. The reductions are deeper than the $30 million in management cuts the airline implemented during its first Chapter 11 reorganization.
By slashing pay and trimming benefits, US Airways acknowledges that it faces the possibility of losing talented executives but said the cuts were necessary if the airline is to emerge from bankruptcy protection.
The carrier also is reducing the number of paid holiday days for executives by 20 percent and replacing sick and vacation leave with a paid time off system based on seniority.
In addition, the airline is slashing its contribution to the managers' retirement plan to 3 percent from as much as 13 percent, regardless of the worker's age or seniority. The airline is reducing retiree benefits, including medical, dental and life insurance beginning January 2005. The changes will force retirees to pay a higher deductible.
The cuts come as the airline is trying to secure about $950 million in savings from its labor unions. US Airways executives said that without the pay cuts, the airline could be forced to liquidate by February.
On Thursday, US Airways plans to ask a bankruptcy court judge to impose a temporary 23 percent pay cut on its labor groups that have not already agreed to concessions.
The airline has reached agreement with its 150 flight dispatchers as well as its flight-crew instructors and flight-simulator engineers. The airline continues to try to obtain agreements with its larger unions including its mechanics, flight attendants and reservation agents.
The lead negotiators of the pilots union agreed Friday to the airline's 18 percent pay cut to help save $300 million. However, the agreement stalled over the weekend and is expected to be discussed today by union leaders, who along with the 3,300 pilots must sign off on it.