• Special Bulletin - Dave Siegel 
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To All Employees ... Please Post ... Special Bulletin

(Note: This afternoon, CEO Dave Siegel held a conference call with the leaders of all unions representing employees at US Airways. This Special Bulletin is being issued so that all employees are aware of the subject and message of that call.) 

Dear Fellow US Airways Employees: 

I cannot overemphasize the critical need to conclude our negotiations and to quickly ratify the tentative agreements to implement labor cost savings. As you know, we have progressively been withholding payments on legally binding obligations to aircraft lessors and lenders. This has been done in conjunction with our negotiations with these same parties as we seek to reduce our costs. The reality is that we are now in default on a growing number of public and private debt obligations. 

While I have consistently said that a Chapter 11 filing is one option in our successful restructuring - a bankruptcy filing forced by a third party is a very different scenario. If we pursue bankruptcy protection, it is NOT with the intent of liquidation, but rather to utilize Chapter 11 to successfully restructure. I cannot guarantee such a path in a forced bankruptcy filing. 

I am hearing from some employees that our references to bankruptcy are in some way scare tactics to force wage cuts. I have committed to you, however, that we are trying to forever change labor-management relations at this company, and put us on a path of trust, cooperation and ultimately, success. Therefore, I am not interested in scare tactics, saber-rattling, or any other terminology or activity that might otherwise characterize the negotiation process. I do feel an obligation to keep employees informed of the process, and for that reason, this communication is being sent in conjunction with my call with union leaders. 

No one is questioning the fact that all parties are working hard, and that most of our unions have stepped up with very significant savings. Your negotiators have delivered for the company, the union, and their members. We are, however, in a foot race with the clock. And we are in a number crunching exercise with the financial community. I certainly do not want to minimize the cost savings being provided by union negotiators - they are significant and important. But we must now figure out how to make the numbers work, given that we are likely to secure about 85 percent of the target we established for labor cost reductions. 

At this time, I can't tell you what path we will take to implement our restructuring. My preference is still a voluntary restructuring, but a Chapter 11 filing remains a very real possibility. Frankly, a Chapter 11 filing may be required to preserve the labor agreements that are negotiated and ratified, while obtaining the necessary relief from lessors, lenders and vendors that might remain unwilling to work with us on a financial restructuring. But one way or another, I am committed to a successful restructuring that will save as many jobs as possible, preserve pensions and benefits, and continue to give as many employees as possible a place to build a successful career. 

The time for brinkmanship by any of us is over. We simply must get these agreements finalized. And we must get these agreements ratified quickly. Our ability to secure the $1 billion loan guarantee, line up outside financing, and work with our creditors is now measured in days, not weeks or months. 

Sincerely, 

Dave Siegel
 

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