Concession Vote Leaves US Airways Short

August 29, 2002 ( - US Airways came up short in its bid for wage and benefit concessions it had hoped to wring from its largest union.

The Arlington, Virginia-based air carrier, currently seeking protection from creditors in US Bankruptcy Court, had hoped the 12, 000 members of the International Association of Machinists (IAM) would OK give-backs worth $219 million in annual savings.

But, because of a split between fleet-service workers and mechanics and other US Airways workers, the airline walked away from Thursday’s employee voting with only $65 million in estimated cost cuts. The company is shooting for $1.2 billion in overall savings as part of its financial reorganization.

According to an Associated Press news report citing court records, the vote was intended to allow US Airways to gain access to $175 million in financing that is part of a larger $500 million package.

The AP said fleet workers, who load luggage and freight, approved the company-requested concessions by a 62% margin. Mechanics and related workers, who voted separately, rejected the proposal by a 57% margin.

The proposals being voted on would:

  • cut by 8% wages for fleet service employees but would bump up salary by 2% or 3% between 2005 and 2008. The fleet service workers would also lose 10 sick days, vacation days and holidays.
  • cut wages for the mechanics and related employees by 7% right away, followed by annual increases of 2% in 2004 to 2007 and a 5% increase in 2008. They also would have lost nine sick days, vacation days and holidays.

US Airways is negotiating with one other union, the Communications Workers of America, on a wage and benefit concession package.

The CWA’s 6,700 passenger service employees are being asked to accept $70 million in annual wage cuts.

US Airways, the nation’s seventh largest carrier, is the first major airline to file for bankruptcy following the September 11 attacks.