US Airways reached tentative agreements on concessions last night with unions representing its machinists and flight attendants, completing a package for an additional $200 million in wage and benefit cuts that the airline needed to avoid liquidation.
The moves came as US Airways prepared to file a reorganization plan in U.S. bankruptcy court in Alexandria, Va. The plan, which a judge will consider at a hearing Jan. 16, was set to include proposals for returning the airline to profitability. It hopes to emerge from bankruptcy by spring.
However, the airline planned to withhold details of the proposal until this morning, said David Castelveter, a spokesman for the airline, which is the country's seventh-largest carrier.
The Machinists union and the Association of Flight Attendants were the final two employee groups to agree to give US Airways additional cuts in pay and benefits, on top of $850 million in concessions in the fall. The Machinists originally refused to give more in concessions, and the flight attendants' union had said it would agree to more cutbacks only after other unions at US Airways had done so.
The Machinists' union, representing 11,100 mechanics and other maintenance workers, said leaders at the airline agreed to cuts worth $59 million. A vote on the cuts was scheduled for early January. The flight attendants' union, representing 7,500 workers, did not disclose the size of its concessions. It said its members would vote on the package by Jan. 10.
The latest union concessions were part of a new $200 million round of cuts that were sought by the airline over the past few weeks, after its revenue fell short of the projections made when it filed for bankruptcy protection in August.
David G. Bronner, chief executive of the Retirement Systems of Alabama, which is serving as the primary lender to the airline, threatened earlier this month to withdraw the debtor-in-possession financing he had extended to US Airways and seek liquidation if the unions did not agree to further concessions.
Scotty Ford, president of Machinists' District 131-M, representing the airline's mechanics, alluded to Bronner's threat in announcing the tentative deal last night. "We believe the agreement affords US Airways the best opportunity to avoid liquidation and preserve our members' jobs," Ford said in a statement.
The Alabama pension system agreed in October to provide $500 million in financing in exchange for a 36 percent stake and voting control of the US Airways board. It has already given the airline $300 million, with the remaining $200 million to be provided after US Airways emerges from bankruptcy protection. Bronner could not be reached for comment last night.
This week, the pilots' union agreed to its share of the new round of concessions, worth about $99 million. On Wednesday, the airline reached a tentative agreement on new cuts with the Communications Workers of America, representing gate agents and customer service representatives, as well as the Transport Workers Union, representing flight controllers. Neither group has scheduled a vote on the proposals.