Ramon Lopez/WASHINGTON DC
US Airways and its pilots broke an impasse on labour negotiations at the eleventh hour, saving the US carrier's planned $14 billion purchase of up to 400 A320-family aircraft from Airbus Industrie.
The sixth-largest US airline and negotiators for the Air Line Pilots Association (ALPA) have reached a tentative agreement on a new contract which will allow creation of a low-cost airline subsidiary, dubbed US2. The deal must still be ratified by the union membership, but observers believe that rank-and-file pilots will endorse the package.
Stephen Wolf, US Airways chairman and chief executive, says that he would have let the order slip away if the pilots had not agreed by 30 September to major concessions.
In November 1996, the US airline agreed to a major aircraft deal, including firm orders for 120 A319s, A320s and A321s, plus an additional 120 orders to be reconfirmed at a later date, and 160 options. In announcing the transaction, Wolf warned that the purchase was dependent upon labour concessions. US Airways says that Airbus has agreed to extend the deadline for affirming the order.
The airline and ALPA support the creation of US2, where lower salaries will rival those at Delta Express and Southwest Airlines. ALPA, which represents 4,800 US Airways pilots, insists that US2's services should be limited to 10% of the "mainline" airline's current flying, and rise to 20% if US Airways expands.
US2 will fly only to cities where the airline faces stiff competition from low-fare rivals. It is reported that the deal allows US Airways to devote as much as 23% of its operations to US2.
The pilots will reportedly receive stock and one seat on the airline's board in exchange for significant concessions. US Airways is also said to have agreed to call back more than 300 furloughed pilots and to grant early retirements for senior pilots. US Airways expects that other airline unions will follow the example.
Source: Flight International
