QAN 0.31% $3.21 qantas airways limited

us airways try avert insolvency

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    WASHINGTON (Reuters) - US Airways Group Inc. (UAIR.O: Quote, Profile, Research) issued a general appeal on Tuesday to the carrier's 3,000 pilots after their union's leaders rejected proposed concessions the company says are crucial to avert insolvency.

    The 12-member executive committee of the pilots union rejected a motion late on Monday to send the company's latest proposal to the labor group's full membership for ratification. A deal with pilots is critical to an out-of-court restructuring for the No. 7 U.S. airline, which emerged from bankruptcy protection in March 2003.

    The outcome of negotiations on Monday raised the possibility among analysts of a second bankruptcy filing at US Airways in two years. But neither the pilots nor management, in separate statements, gave up on reaching an agreement on nearly $300 million in givebacks.

    No new talks had been scheduled by late Tuesday.

    However, the carrier reached out directly to the Air Line Pilots Association membership, reemphasizing that time was running short to avoid bankruptcy. Management also questioned the judgment of union executives to not put the proposal before union members.

    "Ultimately, I hope we can succeed and you will be allowed a voice in the decision. I am just baffled as to why a few of your representatives don't trust you to make the proper decision regarding our proposal," Chief Executive Bruce Lakefield said in a message to pilots.

    "We do not take lightly the sacrifices you have already made or the fact that all of us must make more. But we also all know the price is even higher if we simply do nothing," Lakefield warned.

    The union's executive committee struggled for days with sharp internal divisions over the composition of givebacks, including hefty pay cuts, a reduction in pension benefits, and work rule and productivity changes to bring US Airways more in line with the cost structure of low fare competitors.

    Bill Pollock, chairman of the union's executive committee, expressed frustration at the outcome of talks and said minor changes might have meant success. "I also believe that the proposal contained protections that may not be available at a later time," Pollock said in a statement.

    Weakening expectations for a deal pushed US Airways shares lower by 30 cents, or 12.77 percent to close at $2.05 in over-the-counter trading on Tuesday.

    old airlines are having a very very hard time to produce value for their shares.





 
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