Nov. 26, 2002 -- US
Airways announced today that it will furlough approximately 2,500
more employees over the next three months and seek work rule and benefit
changes to complete its cost-cutting initiatives and emerge from Chapter
11 protection in the first quarter of 2003. As part of management’s commitment
to preserve jobs where possible, the company has committed to maintain
the mainline fleet at its current level of 279 aircraft – 34 more than
required under the Restructuring Agreements ratified this past summer provided
the company's labor unions also agree to additional cost-cutting initiatives
that have been proposed by the company for approval prior to the company's
filing of its plan of reorganization in the Bankruptcy Court in December.
"Every mature network airline is struggling with
how to adapt to fundamental changes in the airline business, where high
costs will no longer be subsidized by passengers paying premium fares and
low-cost airlines have become a major force in the industry. Cost-cutting
and furloughs are an unfortunate and painful part of that process, and
as difficult as these furlough decisions are, we must take these actions
to ensure our successful restructuring and stay on plan to emerge from
Chapter 11 protection in March 2003," said David Siegel, US Airways
president and chief executive officer. All work groups will be affected
as a result of this action. Included in today’s announcement are plans
to close a heavy maintenance hangar in Tampa and a reservations call center
in Orlando. Employees who hold seniority-based priority at those two facilities
will be offered positions at other US Airways facilities in
Pennsylvania and North Carolina where these functions will be consolidated.
Further specific details about the number of employees and locations are
not available at this time, but will be communicated to employees as they
Siegel said that as part of
its final push to reduce costs and, in recognition of reductions in fourth-quarter
and 2003 industry-wide financial performance estimates, the company has
begun the process of meeting with its labor union leadership to identify
work rule changes and other cost-saving initiatives. While the airline
has met its original target of cost savings as outlined to the Air Transportation
Stabilization Board (ATSB) in conjunction with its application for a federal
loan guarantee, industry-wide revenue shortfalls have forced the company
to revise its business plan and further reduce operating costs.
"Our airline has some of the
most inefficient work rules in the industry that drive up our costs in
ways we can no longer afford in this new, tough revenue environment. The
good news is that changing some of these rules will make us much more competitive,
without the need to further reduce pay rates. We are clearly focused on
saving as many jobs as possible, and on preserving competitive pension
and benefits compensation, but we can only do that if we have a viable
business," said Siegel. "We have an obligation to all of our stakeholders
to use this Chapter 11 process to make permanent, structural improvements
to our airline so that we are positioned for long-term success."
The Tampa maintenance hangar
will be closed immediately, with work shifted to US Airways
facilities at Charlotte and Pittsburgh. The Orlando reservations center
will be closed on Jan. 10, 2003, with work moved to Pittsburgh and Winston-Salem,
N.C., offices. Non-management employees at the Tampa and Orlando facilities
who hold seniority will be allowed to transfer, should they so choose.
The airline intends to file
its disclosure statement and plan of reorganization on or prior to Dec.
20, 2002, in time for the Bankruptcy Court to consider the adequacy of
the disclosure statement at a scheduled Jan. 16, 2003, omnibus hearing,
and hopes to complete the process of meeting all remaining conditions of
the ATSB loan in the near future.
US Airways currently
has approximately 35,000 active employees and provides service to 200 destinations
in the U.S., Europe, Canada, the Caribbean and Mexico. Since filing for
Chapter 11 protection in August 2002, it has reduced its work force by
almost 2,500. Prior to Sept. 11, 2001, the airline had 49,000 active employees.