By Associated Press, 3/24/2003
The agreement was made Saturday between US Airways and the master
executive council of the Air Line Pilots Association, according to an
announcement by the union representing the pilots on its website.
Spokesmen for US Airways and the Pilots Association did not immediately
return telephone messages yesterday.
With US Airways running out of cash, the company is working to emerge
from bankruptcy to secure $1.24 billion in financing.
The airline has sought to restructure the pilots' pension plan to
reduce its costs. Under the existing plan, the airline estimates that it
will have to contribute $1.6 billion over the next seven years to keep the
plan solvent.
The company believes it can afford to contribute only about $850
million. It has proposed cancellation of the existing plan and using the
$850 million to start a new, smaller plan.
Financial details of the new plan were not revealed on the Pilots
Association's website. The plan affects 4,700 pilots and 1,100 retired
pilots.
Pilots generally receive pensions of $50,000 to $70,000 a year, and the
union estimated that their pensions could be cut in half under the
airline's plan.
The revised pension plan requires the approval of the federal Pension
Benefit Guarantee Corp.
US Bankruptcy Judge Stephen Mitchell ruled earlier this month that the
airline's financial problems are severe enough that they warrant
terminating the pilots' pension plan. But he ordered the airline to
resolve the dispute through the collective bargaining process.
The effective date of the new pension plan is April 1.
US Airways filed for Chapter 11 bankruptcy protection last summer.
Since then, it has secured wage and benefit concessions from its pilots,
stewards, and other employee groups.
US Airways sought protection from its creditors after huge losses
attributed to the Sept. 11 terrorist attacks.
This story ran on page B11 of the Boston Globe on
3/24/2003.
© Copyright
2003 Globe Newspaper Company.