Updated from 2:43 p.m. EST
wants a federal judge to tear up contracts with three of its unions, reduce retiree health benefits and cancel its remaining defined-benefit pension plans.
The carrier, which is on its second trip through Chapter 11 bankruptcy protection this decade, filed a motion Friday with the U.S. Bankruptcy Court for the Eastern District of Virginia to reject collective bargaining agreements with the Association of Flight Attendants, or AFA; the Communications Workers of America, or CWA, which represents ticket-counter and gate agents as well as call-center workers; and the International Association of Machinists and Aerospace Workers, or IAM, which represents baggage handlers, mechanics and maintenance training instructors.
US Airways said the filing does not preclude the carrier from reaching consensual agreements with the three unions. "Our overwhelming preference is that we continue to negotiate and reach agreements with all of our unions," said Bruce Lakefield, the company's chief executive, in a press release. "We would also like to avoid litigation concerning our retiree and pension benefits, but in light of the financial issues facing the company early in 2005, this filing is an unfortunate but necessary step to keep our restructuring on track and to allow us to implement permanent cost reductions quickly."
The filing also seeks substantial reductions or elimination of company-paid retiree health benefits for all employees, including management, and the termination of defined-benefit pension plans currently in place.
In reaction, the AFA expressed outrage: "Management is moving to shred its contracts, while at the same time claiming that it would prefer a consensual agreement with its workers," said Perry Hayes, president of the AFA Master Executive Council at US Airways. "This naked attempt at intimidation demonstrates the company's contempt for its workers and for the collective bargaining process."
The CWA, meanwhile, said it wasn't surprised by the motion, as US Airways had indicated it would make such a move. "While notice of the motion went out, we were bargaining with the company this afternoon," said Candice Johnson, CWA spokeswoman. That's our focus -- reaching an agreement." Among past sticking points have been the company's wage cut proposals, including one in October for 34% reductions, Johnson said.
The airline has been targeting annual labor cuts in excess of $900 million as it seeks to emerge from bankruptcy protection in a much leaner form. Last month, it got about $300 million of those savings when its pilots agreed to a package of concessions that will cut pay by 18%, increase workloads and reduce company contributions to the pilots' retirement plan.
Some pilots, however, may have only voted "yes" to the package after the judge in the case granted the airline's request to temporarily cut pay for all union employees by 21% through Feb. 15. The airline had sought a larger 23% reduction, saying the interim relief permissible under a section of the bankruptcy code was necessary for it to continue through the winter.
US Airways stock finished Friday's session down 4 cents, or 4.7%, at 81 cents.