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Lawmaker: US Airways facing crunch without concessions
PITTSBURGH (AP) — US Airways' chief executive officer met with the state's congressional delegation and the lawmakers concluded that Bruce Lakefield is sincere in trying to turn the airline around — but running out of time.
"What's troubling for the airline is that this quarter is the best chance they have of being profitable, but they could lose $400 million to $500 million this year if they lose money this quarter," said U.S. Rep. John Peterson, a Republican who represents much of northwestern Pennsylvania. "And they don't have money to lose."
The airline, with hubs in Philadelphia and Charlotte, N.C., and a major but declining presence in Pittsburgh, is seeking $800 million in new wage concessions from its pilots, flight attendants and mechanical workers.
Peterson said the lawmakers, including U.S. Reps. Tim Murphy and Melissa Hart, both Allegheny County Republicans, were told that the pilots' union is negotiating new pay cuts, the flight attendants are considering it and the mechanical workers are continuing to refuse.
Some union officials have noted that employees have already given back $1.5 billion in two previous rounds of concessions, and now Lakefield is asking for $800 million more in worker concessions as part of a plan to cut yet $1.5 billion more from the airline's operating expenses.
Murphy said Lakefield promised to ask US Airways' current board to investigate whether the airline might recoup some of the millions in severance pay given to former CEOs David Siegel and Stephen Wolfe and other executives who ran the airline during the earlier wage givebacks.
"We don't know if that's possible, but we're pleased that they're at least going to look at that," Murphy said.
Peterson said that's unlikely to happen, although he understands why lawmakers with lots of US Airways employees in their district — like Murphy — might be seeking such a payback.
"I would doubt that will happen. The CEO said he had outside legal counsel" investigate the former severance packages, Peterson said. "But how do you go back and undo deals cut by former boards?"
"I think it's OK to be mad for today, but tomorrow the workers need to get logical and start thinking, 'How can we preserve what's left?"
US Airways employs about 8,000 in the Pittsburgh area, down from 13,000 before the September 2001 terrorist attacks but hasn't made long-term commitments to employment or flight levels at Pittsburgh International Airport.
Peterson said he's glad the state plans to use $150 million in slot machine revenue to help the airline cut its debt payments at the Pittsburgh airport — a major reason US Airways is cutting service there. But he says that aid will be too late if the state waits until the slots revenue starts arriving in a couple of years.
Peterson is pushing to have the state prepay that aid, so US Airways can cut the debt now, and use the slots revenue to repay the state.
"They need that help now," Peterson said. "They don't need it in two years."
PITTSBURGH (AP) — US Airways' chief executive officer met with the state's congressional delegation and the lawmakers concluded that Bruce Lakefield is sincere in trying to turn the airline around — but running out of time.
"What's troubling for the airline is that this quarter is the best chance they have of being profitable, but they could lose $400 million to $500 million this year if they lose money this quarter," said U.S. Rep. John Peterson, a Republican who represents much of northwestern Pennsylvania. "And they don't have money to lose."
The airline, with hubs in Philadelphia and Charlotte, N.C., and a major but declining presence in Pittsburgh, is seeking $800 million in new wage concessions from its pilots, flight attendants and mechanical workers.
Peterson said the lawmakers, including U.S. Reps. Tim Murphy and Melissa Hart, both Allegheny County Republicans, were told that the pilots' union is negotiating new pay cuts, the flight attendants are considering it and the mechanical workers are continuing to refuse.
Some union officials have noted that employees have already given back $1.5 billion in two previous rounds of concessions, and now Lakefield is asking for $800 million more in worker concessions as part of a plan to cut yet $1.5 billion more from the airline's operating expenses.
Murphy said Lakefield promised to ask US Airways' current board to investigate whether the airline might recoup some of the millions in severance pay given to former CEOs David Siegel and Stephen Wolfe and other executives who ran the airline during the earlier wage givebacks.
"We don't know if that's possible, but we're pleased that they're at least going to look at that," Murphy said.
Peterson said that's unlikely to happen, although he understands why lawmakers with lots of US Airways employees in their district — like Murphy — might be seeking such a payback.
"I would doubt that will happen. The CEO said he had outside legal counsel" investigate the former severance packages, Peterson said. "But how do you go back and undo deals cut by former boards?"
"I think it's OK to be mad for today, but tomorrow the workers need to get logical and start thinking, 'How can we preserve what's left?"
US Airways employs about 8,000 in the Pittsburgh area, down from 13,000 before the September 2001 terrorist attacks but hasn't made long-term commitments to employment or flight levels at Pittsburgh International Airport.
Peterson said he's glad the state plans to use $150 million in slot machine revenue to help the airline cut its debt payments at the Pittsburgh airport — a major reason US Airways is cutting service there. But he says that aid will be too late if the state waits until the slots revenue starts arriving in a couple of years.
Peterson is pushing to have the state prepay that aid, so US Airways can cut the debt now, and use the slots revenue to repay the state.
"They need that help now," Peterson said. "They don't need it in two years."
