Agents OK Pay Cuts at US Airways

Reservations and gate agents at US Airways approved a new contract Thursday that cuts pay by 13% and provides the airline some of the relief it says it needs to avoid imminent liquidation.

The Communications Workers of America union, which represents nearly 6,000 passenger service employees at the airline, said 60% of members who cast ballots voted to approve the deal, which runs though 2011.

The deal is expected to save the airline, which is trying to emerge from bankruptcy protection, $137 million a year.

“This ratification is very important to our future success as it shows our ability to work collaboratively with our employees toward common goals and solutions,” said Jerrold Glass, the airline’s senior vice president of employee relations. “Today, we have drawn much closer to becoming a stronger, more competitive airline.”

Thursday’s vote gives Arlington, Va.-based US Airways Group Inc. ratified deals with two of its four major unions: the CWA and the pilots’ union. It still needs ratified deals from its flight attendants and its machinists’ union.

CWA leaders had urged approval of the deal. They said the pay cuts, although steep, are much less than the 34% cuts initially sought by the airline.

The contract cuts pay for most CWA employees by 13%, with top scale now at $18 an hour. Employees won’t receive pay raises until at least 2008.

The contract also cuts benefits and changes work rules. It also implements a profit-sharing program, but US Airways has estimated that it will be at least 2008 before it could turn any kind of substantial profit. CWA officials said the new deal would take effect Jan. 1.

US Airways has said it needs sharply lower labor costs immediately, or it probably will begin liquidation by mid-January, when its interim financing agreement with the federal government’s Air Transportation Stabilization Board is set to expire.

The airline had asked a bankruptcy judge to cancel the collective bargaining agreements with the CWA, the Assn. of Flight Attendants and the International Assn. of Machinists if those unions don’t reach voluntary agreements with the airline.

The flight attendants have reached a tentative agreement on a new deal, but union leadership is taking a neutral stance and is not recommending approval. The proposed contract would impose pay cuts of about 9% on the union’s 5,200 members and save the airline about $94 million a year. The results of their ratification vote will be announced Jan. 5.

Negotiations with the machinists are continuing, but no deal has been reached.

US Airways shares rose 4 cents to $1.26 in over-the-counter trading Thursday. They have fallen 80% this year.