Investment bankers working for US Airways Group Inc.'s (UAIR) pilots union said the No. 7 U.S. airline could seek bankruptcy protection by mid-September if it does not get needed cost cuts, the Wall Street Journal reported on Friday.

Bill Pollock, chairman of the Air Line Pilots Association (search ) union's group at the Arlington, Va.-based carrier, said in a letter that the union's leadership "does not disagree in principal with the conclusions" reached by the union's banker, Glanzer & Co., the newspaper said.

"The reality of our financial situation speaks for itself," the letter said.

The airline did not immediately return a call seeking comment.

The 26-page report, dated July 14 and released this week to 3,400 ALPA members, according to the newspaper, essentially confirms US Airways' own wary outlook for its future.

The report said the carrier's creditors have already put claims on its cash to minimize losses if US Airways (search ) collapses, the newspaper said, and that US Airways "might be worth more dead than alive to groups other than the employees" because other airlines might use its assets more profitably.

Last month, US Airways Chief Executive Bruce Lakefield told employees that if the carrier fails to cut costs, it "could just run out of steam sometime next year."

US Airways lowered its cost structure during its eight months in bankruptcy protection in 2002 and 2003. But soaring fuel prices and growing market share among discount carriers have made it difficult for the carrier to succeed.

As part of its drive to cut costs by $1.5 billion, US Airways has said it needs about $800 million of labor concessions.

This includes $295 million from pilots, $263 million from mechanics and fleet service workers, $122 million from reservation agents and passenger service and ticket counter employees and $116 million from flight attendants.

Pilots have offered to take pay cuts of 12.5 percent and work more hours through 2008. Flight attendants have said they would discuss concessions.

The carrier recently said it would discontinue Pittsburgh as a flight hub. On Thursday it said it would halt nonstop service from that city on 20 routes, but maintain such service to more than 50 markets.

US Airways shares fell 9 cents to $2.54 on Thursday. They began the year at $6.22.