US Airways Circles for Time

US Airways (UAIRQ Quote) is throwing itself at the mercy of a bankruptcy court, warning that it will be forced to liquidate in mid-February if employees don't immediately cut their pay by 23%.

In a court filing, the beleaguered airline asked U.S. Bankruptcy Court Judge Stephen Mitchell to sign off on its Section 1113(e) motion, which would temporarily rewrite the company's labor contracts, enabling it to cut costs immediately. US Airways wants to have these new agreements -- which include 23% pay cuts, lower pension obligations and the ability to fire employees regardless of seniority -- in place by Oct. 14.

With a weak balance sheet and heavy losses, US Airways entered bankruptcy without debtor-in-possession lending, which means the carrier is using cash to fund operations. But with high labor costs and oil above $50 a barrel, the airline is burning through its lifeblood and warned that it may have to liquidate in five months if it can't generate $200 million in cash to keep going. ...