US Airways Group Inc. said today that it would lay off 2,500 employees, including 13 at Baltimore-Washington International Airport, over the next three months to complete its cost-cutting efforts as it seeks to emerge from federal bankruptcy protection by March.
"In order for us to do this, we have to adhere to our plans," said David Castelveter, a spokesman for the carrier, based in Arlington, Va. "We have to make these cuts, and we have to make them now."
The overall job cuts, totaling about 7.1 percent of US Airways' work force, are part of the No. 7 carrier's plan, which also includes seeking work-rule and other benefit changes. US Airways sought protection from its creditors in August.
The layoffs affect about 300 workers at a maintenance hangar in Tampa, Fla., which was closed today, and 331 employees at a reservations center in Orlando, which will be shut down on Jan. 10.
The company said all work groups will be affected by these actions. US Airways has about 35,000 active employees.
Workers who hold seniority-based priority at the Florida operations will be offered positions at other company facilities in Pennsylvania and North Carolina where these functions will be consolidated, Castelveter said.
The 13 workers at BWI to be affected include 12 full-time employees and one who works part-time, Castelveter said. They primarily work as ticket agents and baggage handlers. US Airways is the No. 2 carrier at BWI, and the airline has cut more than 700 jobs there since the Sept. 11 attacks.
Those workers will be joining the 33 US Airways employees to be furloughed at Reagan National Airport in Washington, D.C., and the 14 to be cut at Dulles International Airport in Virginia.
"It's a very difficult time, certainly," Castleveter said. "No time is a good time to do this."
Last month, US Airways said it would lay off an additional 642 workers, bringing the number of planned November and December layoffs at that time to about 2,050.
In 2001, the airline lost $2.1 billion, on revenues of $8.3 billion.
US Airways on Friday asked the judge hearing its bankruptcy case to extend by a month the airline's deadline for filing its plan to emerge from federal protection.
If the judge agrees to, the company would have until Jan. 31 to file its plan without the threat of competing plans being filed.
"We asked for the extension just in case we need it," Castelveter said today. "In the event that economic conditions worsen, we go to war with Iraq, or fuel prices go up -- and we needed the time -- we would be able to have it.
"Our plan is to still submit our emergence plan by Dec. 20," he said.
US Airways hopes to emerge from Chapter 11 with the help of Retirement Systems of Alabama, a pension fund that has agreed to invest $240 million in return for a 37.5 percent of the carrier.
The fund also has provided $500 million in debtor-in-possession financing to help US Airways finance its operations while in bankruptcy proceedings
The plan includes a $900 million conditional loan guarantee from the U.S. Air Transportation Stabilization Board, established in the wake of Sept. 11.
"Our hope it to emerge a stronger and viable competitor," Castelveter said.
In addition, US Airways said it has committed to maintain the mainline fleet at its current level of 279 aircraft -- 34 more than required under the restructuring agreements ratified last summer. That is contingent upon the company's labor unions agreeing to additional cost cuts that already had been proposed by the company for approval.
As part of its final push to reduce costs, US Airways said it is meeting with its labor union leadership to identify work-rule changes and other initiatives that would save money.
While the airline has met its original target of cost savings as outlined to the stabilization board in conjunction with its application for the loan guarantee, industry-wide revenue shortfalls have forced US Airways to revise its business plan and further lower operating costs, the company said.
"Our airline has some of the most inefficient work rules in the industry that drive up our costs in ways we can no longer afford in this new, tough revenue environment," David Siegel, US Airways' president and chief executive, said in a statement.
Robert L. Johnson, the founder of Black Entertainment Television who also is a US Airways board member, discussed the carriers plight in an interview last week.
"We all strive to have low fares in the airline industry, but low fares are a function of costs," he said. "You cant have fares below costs.
"Part of the problem is that you have very high labor costs," added Johnson, who is seeking to build a major hotel near the Baltimore Convention Center. "You have very strong unions, with strong work rules that may not be as efficient as we would like. These costs add up to the price of a ticket."