US Airways' Rehiring Spree

About 1,000 management employees, including about 400 of the 600 workers at the former Crystal City headquarters in Arlington, Va., lost their jobs, many because they were unwilling to relocate to Phoenix, where America West has its headquarters and employs nearly 10,000 people. The airline also closed its Pittsburgh reservations center and reduced the Winston-Salem workforce from 800 to 450. That number has since grown to about 600, and will increase as more reservations agents are hired and trained.

To be sure, Parker faces a difficult task as he moves to combine labor groups. Union workers who accepted cuts in wages and benefits during the bankruptcy now see a profitable airline whose stock price more than doubled since shares began trading last year at $20.40. About six dozen pilots marched silently into the airline's annual meeting in Charlotte last week, demonstrating their commitment to an improved contract.

"No single investor, no investor group, has equaled the capital that this group has committed to the new US Airways," said Jack Stephan, chairman of the US Airways chapter of the Air Line Pilots Association. Stephan valued the concessions made by pilots at more than $2 billion, including pension concessions. "We participated in the worst of times, and we expect to equally participate in the best of times," he said.

The US Airways' pilots contract doesn't open until 2009, but the America West pilot contract is up for renewal on June 30. America West pilots are paid more than US Airways pilots, and will be seeking an increase. Clearly, US Airways pilots, who are more senior, expect to be paid as much as America West pilots -- which conflicts with Parker's commitment to put the contracts together without raising costs.

Parker said nothing requires that the two airlines have a single contract. He noted that Delta and Northwest are reducing their labor costs in bankruptcy court. Meanwhile, AMR(AMR Quote) unit American Airlines "is saying they need to go back to their employees and get their costs down," he said. "In an environment where everybody else is going through concessionary contracts, to suggest it's time to increase our pay is difficult."