US Airways offers pilots new cost-cutting plan Progress is reported in talks; firm wants to start low-cost unit; Airlines


In the latest of a series of proposals and counterproposals, US Airways yesterday gave its pilots' a new plan to reduce costs, hoping to reach an agreement before the company's deadline to affirm its huge aircraft order.

The company is seeking cuts that would eliminate the gap between the cost structure for its 4,800 pilots and that of other major airlines. US Airways also wants to create a low-cost division within the airline that would require a two-tier wage system for pilots and place more than a fourth of the airline's planes in that operation.

Neither side would comment yesterday on the airline's latest offer.

Talks shifted yesterday from Philadelphia to Washington, where the Air Line Pilots Association is headquartered; US Airways is based in Arlington, Va., a Washington suburb.

A spokesman for the US Airways chapter of ALPA said yesterday that while major issues remain, the two sides have made progress on some points, such as how much of the airline's total flying would be done by the proposed low-cost division. In addition, he said, the union has continued to discuss the company's key goal of parity.

"Just talking about parity was progress," said Mike Oakey, referring to the company's insistence that it must immediately eliminate the gap between US Airways' cost for pilots and the average cost of American, Delta, Northwest and United.

"I think a deal could be done rather rapidly if two sides could just agree on a couple things," he added.

On its hot line early yesterday, before the latest proposal was received, the union insisted that the company had not addressed key issues, including adequate job security protections or financial returns in exchange for its concessions.

The union has agreed to the concept of parity but wants to achieve it by 2002. It also wants assurances that the company will grow and therefore provide more opportunity for flying.

US Airways has said it will guarantee a growth rate 20 percent higher than the composite rate of the Big Four airlines.

But it has said that it can't start growing until next year because it will not have new aircraft available before then.

"They want to shrink the airline before starting any growth," said a recorded message on the pilots' hot line yesterday.

The talks were continuing as the company faced 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 could shrink to a regional airline without a satisfactory pilots' contract.

It is all but impossible that any agreement could be ratified by the pilots before the deadline, but the two sides might reach an agreement in principle that would allow the company to move forward with the Airbus contract.

Pub Date: 9/24/97

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