NEW YORK – US Airways Group Inc. (search) will ask a bankruptcy court on Friday to impose emergency pay cuts of 23 percent on unionized workers if an agreement with the workers is not reached during the day.
In a letter to its unions, the No. 7 U.S. airline said it also plans to cut or stop contributions to certain retirement plans. The cost reductions were "absolutely necessary" for its survival, the airline said.
"The company is requesting immediate contract relief ... in order to stabilize our cash flow during this traditionally slow fall and winter period, in which we are also experiencing high fuel prices and a revenue environment driven by low-cost carrier pricing," Jerrold Glass, vice president of employee relations, wrote in the letter.
An airline spokesman said the company would file the motion if an agreement was not reached with the unions in the course of the day.
But Jack Stephan, spokesman for the US Airways Airline Pilots Association (search), said in an interview: "The chances of us having a long-term fix today ... well, there probably won't be one today. If they want interim relief, they have to go to court for that."
He said while the union plans to oppose the motion in court, it is committed to reaching a permanent solution with management that will return the airline to sustainable profitability.
US Airways filed its second bankruptcy petition in two years last week.
The airline also said it plans to end its commitment to keep 279 planes in its fleet -- a pledge the carrier made last year when it emerged from its first bankruptcy.
Earlier this week, the airline had made a new proposal to its pilots, seeking nearly $1.9 billion in savings through 2009, more than the $1.5 billion originally proposed.
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