US Airways seeks end of labor pacts

ALEXANDRIA, Va. -- US Airways asked a bankruptcy judge yesterday to cancel labor contracts with three of its unions and impose much lower pay so it can move ahead with a plan to permanently cut costs, reposition itself as a low-cost carrier, and avoid a possible liquidation.

The 120-page court filing also asks the judge to eliminate retiree health benefits and cancel its two remaining pension plans, which provide benefits to its machinists and flight attendants.

The airline is asking the judge to impose new labor contracts with pay cuts ranging from 6 to 27 percent for various employee groups and with work rules that unions say would result in significant job losses.

"If they do not obtain these financial accommodations . . . it is highly likely that they will have to begin the commencement of an orderly liquidation" as soon as January, when the bankrupt airline's interim financing deal expires, US Airways' lawyers said in their court filing.

A hearing on the issue is scheduled for Dec. 2. The airline is continuing negotiations with its unions.

So far, the airline has new deals in place with its pilots and its smaller Transport Workers Union. But it is still negotiating with the International Association of Machinists, the Association of Flight Attendants, and the passenger service employees represented by the Communications Workers of America, which collectively represent a majority of the airline's 28,000 mainline employees.

US Bankruptcy Judge Stephen Mitchell, who is presiding over the case, has already allowed the airline to impose 21 percent pay cuts on workers represented by the machinists' and flight attendants unions and the CWA.

But those pay cuts are stopgap measures that do not include the changes to work rules and benefit cuts the airline says are necessary to become competitive.