US Airways Group Inc. rejected its pilots' latest proposal yesterday, saying it would significantly increase the company's costs in the future rather than achieving the parity the airline insists it needs with other major carriers.
In a surprise offer this week, the union agreed for the first time to work toward creating parity between US Airways' pilot costs and the average of other major airlines. The pilots proposed, however, that parity be achieved by 2002, rather than immediately as the company had requested.
Yesterday, the Arlington, Va.-based company issued a statement saying the union was targeting parity for only a portion of the contract, "years later than when necessary and even then parity is not assured."
The union's proposal contains favorable changes affecting the cost structure, the company said. But "in total, their response would significantly increase the company's pilot costs going forward."
A spokesman for the pilots union could not be reached for comment.
The company yesterday canceled several employee meetings so company officials could focus on the negotiations. This week, top US Airways officials began meeting with employees in Charlotte, N.C., and Pittsburgh and had planned sessions in four other cities, including Baltimore.
Negotiations between the two sides continued yesterday in Philadelphia. It was not clear whether the latest proposal from TTC the Air Line Pilots Association had moved the negotiations forward at all, even as the company faces a Sept. 30 deadline to affirm a $14 billion order with Airbus Industrie for 120 jets, with an option for 280 more.
US Airways has said it cannot affirm the deal without a cost-cutting agreement with its pilots in place. The company has said that it wants to become a global carrier but has threatened to shrink to a regional airline without a satisfactory pilots' contract.
The latest offer calls for cost parity plus 3 percent by 2002; the company has asked for immediate parity plus 1 percent. In addition, the union wants a labor arbitrator to determine the cost difference between pilots at US Airways and the average of pilots at United, American, Delta and Northwest. The company had proposed that an independent auditor determine that figure.
Once a cost difference is determined, pilots would be allowed, under the company's proposal, to determine how to arrive at an equal cost structure. The airline says adjustments and cuts could come in productivity, wages and benefits and financial returns.
Investors appeared to believe the pilots' offer was a good sign; US Airways shares gained $2.625 to $41.5625, a 52-week high, yesterday on the New York Stock Exchange.
Pub Date: 9/20/97