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August 16, 2004 |
- USAIRWAYS ASKS TO DELAY PENSION CONTRIBUTION
- NEGOTIATIONS UPDATE
- ALPA REPORT
USAIRWAYS ASKS TO DELAY PENSION CONTRIBUTION
USAirways said on Monday it will seek approval from the IRS to delay its pension fund contributions for 2004. The Company is asking the IRS to allow it to delay a 67.5 million dollar payment to the pension funds for the Association of Flight Attendants and the International Association of Mechanics due in this year. According to the Company this will help USAirways conserve cash and improve liquidity in an effort to promote the Company's survival. If approved, the waiver will allow USAirways to apply payments already made this year to the deferred payments of 2003. This will reduce the 110 million dollar payment required on September 15, conserving cash and helping to forestall a bankruptcy filing. The Company faces possible default on ATSB and General Electric loans during the third quarter of this year. If the Company's cash balance drops below a certain level either of these two loans could be called resulting in possible liquidation of the Company. I believe this waiver is being sought to help the Company keep enough cash to avoid default. The Company has said this move will not affect retirees or current employees.
NEGOTIATIONS UPDATE
The negotiating committee and the Company will meet this week. The full MEC will meet on Friday August 20th and be updated by the committee. We will be reviewing the progress made to date and provide input to the committee. As you are aware the Company's proposal and the AFA term sheet are available on the MEC Web Site at http://www.afausairways.org/Restructure/cover_81204.htm. As I said last week a lot of the contents of both are sketchy. Remember, these are the opening proposals and details will be added during the process. You will not be asked to vote on anything that contains the words, "to be determined or discussed". I will continue to provide details to you as they become available.
ALPA REPORT
Over the weekend several newspaper articles reported USAirways is in danger of bankruptcy or liquidation in the near future. The articles quoted a report commissioned by ALPA stating USAirways is in danger of default on several loans and could face the possibility of one or more of those loans being called if it the Company does not reduce it's costs. AFA was not caught unaware of this fact as our own analysts have told us of the realities USAirways faces. These realities are the reason the MEC voted to negotiate cost saving measures in July. CEO Bruce Lakefield stated in his phone message last week his dismay over the pace of the negotiations. I believe AFA is proceeding at a reasonable pace and will continue to do so. The MEC and the negotiating committee are aware of the Company's financial position as it tries to transform itself. We are committed to finding an acceptable outcome. It is our desire to find a solution that helps ensure the Company's survival and our members' quality of life. This is a difficult balancing act and we are doing our best. I understand that preservation of our jobs is paramount. I ask for your continued support.
Thank You,
MIKE FLORES
LEC PRESIDENT
COUNCIL 89
AFA-CWA AFL-CIO
704-527-0325 OFFICE
704-576-3174 CELL
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