US Airways pilots yesterday approved a five-year, cost-cutting contract that will reduce their pay about 18 percent and save the airline about $1.8 billion over five years, the union said.
The union's ratification means the pilots are exempt from the 21 percent, across-the-board employee pay cut that a bankruptcy court judge last week imposed through February.
Of 2,926 pilots who cast ballots, 1,690, or 58 percent, voted to ratify the contract and 1,236 voted against it, the union said. The US Airways chapter of the Air Line Pilots Association has 3,291 members.
The biggest opponents of the contract were members based in Pittsburgh and Philadelphia, two of the airline's largest hub operations. Of pilots based at Reagan National Airport, 73 percent voted in favor of the agreement.
"This agreement provides us with the means to survive, emerge from bankruptcy as a formidable competitor, and ultimately prosper in even the most challenging of economic environments," said Bill Pollock, head of the US Airways pilots union.
The agreement reduces retirement benefits, increases work hours largely by trimming vacation and sick days, and eliminates retiree medical coverage. The contract saves the airline at least $300 million a year through Dec. 31, 2009. The union projects that the annual savings will escalate over the term of the contract because of the longer work hours and other improvements in productivity.
The contract is a major boost to US Airways Group Inc., which is trying to cut its long-term labor costs by $950 million a year to transform itself into a profitable low-cost, low-fare airline.
The Arlington-based airline filed for Chapter 11 bankruptcy protection last month for the second time in two years after failing to reach agreement on labor contracts up for renewal.
"Our pilots have demonstrated their leadership in working with us as we transform US Airways into a successful and competitive airline. We appreciate their thoughtful and careful consideration of the very difficult issues that will soon confront virtually every one of our legacy competitors as well," US Airways said in a statement.
Rising fuel prices and the growth of lower-fare carriers such as JetBlue Airways Corp., AirTran Holdings Inc. and Southwest Airlines Co. have forced many of the traditional hub-and-spoke carriers such as US Airways to dramatically reduce their own costs to survive.
US Airways held negotiations with its flight attendants union earlier this week. The airline is scheduled to meet with its mechanics next week, said US Airways spokesman David Castelveter.