Negotiations between labour and management continue unabated at USAir, whose pilots in late March agreed in principle to a concessions-for-equity deal. Meanwhile, Canadian Airlines International is following the lead of its US counterpart by threatening unions with a corporate downsizing if concessions are not obtained.
USAir negotiators finally reached agreement with pilots that could include a 22 per cent pay cut, as well as the right to furlough up to 300 pilots. Sources estimate the deal to be worth close to $1 billion over five years; the total savings target is $2.5 billion over that period. The concessions package will create an employee stock ownership plan, which, with the agreement of the airline's two other main unions - machinists and flight attendants - could result in a 20 per cent employee stake and a quarter of the 12 board seats under worker control.
However, at presstime progress was slow in discussions with other unions, while even the pilots were stressing their concession agreement was not formal. USAir now has plans to downsize, including a 5 per cent capacity cut over the next five months.
Canadian Airlines is threatening a similar downsizing programme. The carrier's management is demanding from its employees an immediate cash flow improvement of C$325 million ($233 million), with C$125 million of that coming from union workrule changes and most of the rest achieved by other efficiency improvements. If unions do not agree to the changes, company president Kevin Jenkins has threatened to restructure the route network and cut personnel.
Source: Airline Business
