US Airways Cuts Passenger Perks to Reduce Costs

ARLINGTON, Va. —  US Airways Group Inc., still flying after filing for Chapter 11 bankruptcy protection, eliminated a number of traveler perks Tuesday to reduce costs, a day after asking a bankruptcy judge for permission to cancel expensive labor agreements.

Shrunken travel demand and thinning corporate travel budgets have put airlines around the globe through the wringer since the Sept. 11 terrorist attacks.

The leading U.S. carriers are reducing costs to offset flagging revenue, cutting back on everything from extra utensils to workers’ salaries.

US Airways, the seventh-largest carrier in the nation, said that it increased its fee for issuing some paper tickets from $10 to $25 when electronic ones are available and that it stopped allowing holders of nonrefundable tickets to fly standby.

Nonrefundable tickets now lose their value when travelers change their itineraries once a trip gets underway.

The airline, which reported a $248-million loss in the second quarter, also began charging economy-class travelers for alcoholic beverages on transatlantic flights in an attempt to reduce costs.

“These are sort of minor trimmings,” said George Hamlin, an aviation consultant at Global Aviation Associates. “They’re not the basic cuts that address things like labor costs.

“Some consumers will be annoyed,” he said.

Since filing for bankruptcy protection Aug. 11, US Airways has sought contract concessions from its 19,000 workers.

Hammering out its many labor issues has been a linchpin, the company has said, to getting its financial house in order.

US Airways’ unionized pilots, flight attendants and other employees already have agreed to concessions that will save the airline more than $560 million each year.

But the carrier has not sealed deals with its 12,000 mechanics and baggage handlers, represented by the International Assn. of Machinists and Aerospace Workers, or with 6,700 reservation agents and ticket-counter workers, who are represented by the Communications Workers of America.

US Airways expects those two employee groups to bear almost a quarter of the total targeted $1.2 billion in annual savings, and more than one-third of the $950 million in cost-cutting it expects from labor groups.

The airline asked a Bankruptcy Court judge to let it reject the contracts already in place with those workers if the two sides cannot reach “mutually agreeable cost-reduction agreements” before a date to be set by the judge.

A hearing on that request is scheduled for Sept. 10.

The Arlington, Va.-based company’s shares were unchanged at 69 cents in over-the-counter trading. The stock has fallen 89% this year.