Dear US Airways Flight Attendant:
This afternoon, I received the attached letter from Jerry Glass, SVP Human
Resources (see letter below), advising AFA that the Company will seek interim relief under Section 1113(e) of the Bankruptcy Code. The Company has indicated that they intend to seek the following interim relief:
1. a 23% pay cut;
2. an increase in the pay cap of 5 to 10 hours or one additional trip in the
ITD;
3. elimination of the minimum aircraft (fleet) requirement.
A hearing on the Company's motion may occur anytime in the next two weeks.
We know that none of us, as US Airways Flight Attendants, can afford a pay cut of the magnitude the Company is seeking. Therefore, we intend to negotiate to reduce the severity of the interim relief the Company has indicated they will request. The 23% cut represents, in straight wages, about half of the roughly $116 million the Company is demanding in our negotiations. If those negotiations fail to yield an agreement, AFA's attorneys will represent us when the motion is heard in the bankruptcy court.
It is important to note that the Company is not seeking additional furloughs through this request for interim relief.
We will update you as soon as additional information becomes available.
We know you to continue to perform your duties as professionally as possible during these trying times.
Sincerely,
Perry Hayes
MEC President
--------------
September 22, 2004
Mr. Perry Hayes
Master Executive Council President, US Airways
Association of Flight Attendants-Communication Workers of America, AFL-CIO
200 Marshall Drive
Coraopolis, PA 15108
Dear Perry:
As you are aware, on September 12, 2004, US Airways, Inc. and its affiliates (collectively, "US Airways" or the "Company") filed petitions in the United States Bankruptcy Court for the Eastern District of Virginia, Alexandria Division, for reorganization under Chapter 11 of the Bankruptcy Code, 11
U.S.C. § 1101 et seq.
The Company is requesting immediate contract relief as described below 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.
While Section 1113(e) of the Bankruptcy Code permits the Bankruptcy Court to impose interim modifications in these circumstances without bargaining, the Company would prefer to reach a consensual agreement on the immediate cost reductions that are absolutely necessary for the Company's survival. Accordingly, below please find US Airways' proposal for such interim relief (the "Section 1113(e) Proposal") for all AFA-represented employees.
Effective Date: Immediately.
Duration: This agreement will expire upon the earlier of the first pay period following: (x) March 31, 2005; or (y) the effective date of a ratified Transformation Plan Letter of Agreement, or (z) the implementation of permanent relief under Section 1113(c) of the Bankruptcy Code.
Rates of Pay: Base rates of pay will be reduced by twenty-three percent (23%) and frozen at the reduced level for all longevity steps (excluding MDA).
Minimum Aircraft: The provisions of the January 2003 Restructuring Agreement regarding Minimum Aircraft (including the daily utilization rate measured monthly) will not apply.
Monthly Obligation: The VP of Inflight may for each month, at any time prior to or during such month, increase the monthly obligation for all flight attendants in a given base by either five (5) or ten (10) hours (or by one (1) additional trip for flight attendants in the
ITD); provided, however, that such establishment of a revised monthly pay obligation will not result in furloughs, but would be used to balance staffing in the event of attrition or staffing shortages that might disrupt flight operations.
Bruce Ashby will contact you to discuss this proposal. The Company cannot delay, however, in seeking Bankruptcy Court approval of these interim modifications if we are unable to reach a consensual solution. Accordingly, the Company plans to file for interim relief under Section 1113(e) on September 24, 2004. We will, of course, continue to pursue - and hope we can achieve - a consensual resolution prior to hearing on the motion.
Sincerely,
Jerrold A. Glass
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