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TheStreet Open House

US Airways Talks Set to Resume

Updated from 12:54 a.m. EDT

US Airways (UAIRQ) pilots have been ordered to return to the negotiating table to hammer out an agreement on wage concessions to help save the already bankrupt airline.

After a series of internal meetings in Charlotte, N.C., the union leadership representing US Airways' pilots have agreed to jump-start negotiations on management's latest offer, which the union received on Monday. Two weeks ago, the union balked at putting management's last offer to a general vote, helping push the company into bankruptcy for the second time in two years.

"This resolution, passed unanimously by our governing body, allows our pilot negotiators to proceed unrestricted and provides them with a renewed momentum to reach a tentative agreement ... We expect a fair resolution to the unfortunate circumstances we face," said Jack Stephan, spokesman for US Airways' pilots. "Both pilots and the company are in full agreement on the necessity of returning this airline to profitability. And we are prepared to work day and night to see that happen."

Reaching consensus on management's latest proposal could be difficult. Pilots have been fractured by the issue of concessions, with union leaders willing to sacrifice to save the company, and local union representatives unwilling to compromise with a management team that failed during the first bankruptcy.

"We have been telling all of our labor groups for the longest time that it was in everyone's best interest to reach agreements outside of bankruptcy court," said a spokesperson for the airline. "Now that we have filed Chapter 11, we're having to adjust our transformation plan and continue to negotiate to reach a consensual agreement, but may be forced to use the tools of the court that are available to us."

Union sources say the company could petition the court to cancel labor contracts in the coming days or weeks.

If pilots reject the latest proposal, US Airways could file a 1113 motion, forcing pilots and management into a two-to-three-week period of negotiations to reach consensus. If no agreement can be forged over that span, the bankruptcy court holds a hearing and the judge must decide on the contracts within 30 days. From filing to finish, the process would take no longer than seven weeks.

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