US Airways has bought itself more time in its bankruptcy court reorganisation to seek further labour cuts as traffic falls short of expectations.
The carrier, which went into bankruptcy protection in August, now has until the end of January to file its plan of reorganisation with the court. After that, others can present competing proposals and attempt to overturn the carrier's own plan. US Airways hoped to file its plan by year-end, but wanted the breathing space. It would present that to the Air Transportation Stabilisation Board as the last step in gaining final approval of the $900 million loan guarantee that the panel has tentatively approved.
The airline went back to its unions for a second round of cost cuts in addition to the $1.3 billion in concessions it gained after the filing. Its pilots union agreed in mid-December to add about $100 million in cuts to the $465 million it had already agreed upon, but the airline's machinists and flight attendants were balking at providing the extra $100 million US Airways says it needs.
The lead financier of the reorganisation, Retirement Systems of Alabama head David Bronner, had threatened to withdraw support for US Airways and liquidate it unless the second round of cuts was forthcoming.
Source: Airline Business
