The Militant - August 12, 2002 -- U.S. airlines demand concessions

Vol.66/No.30 August 12, 2002

U.S. airlines demand concessions

BY RÓGER CALERO
US Airways and United, two of the largest airlines in the United States, are demanding hundreds of millions of dollars in concessions from cleaners, maintenance staff, ramp workers, and flight attendants, along with pilots and other employees.

United has demanded 10 percent in wage cuts from the International Association of Machinists (IAM), representing 23,000 workers at the company, which is second in size to American Airlines. The IAM has rejected the demand, while accepting the deferment of almost $500 million owed workers in back pay.

To date IAM representatives at US Airways have also not signed on to the cuts demanded by the bosses. "Our negotiators do not feel that any type of agreement is imminent," said union spokesman Joe Tiberi. The union representing flight attendants at the airline has tentatively agreed to cost-cutting measures worth $77 million each year until 2008.

The organization representing 4,800 pilots at US Airways has agreed to reductions in salaries and benefits of $465 million a year. At United, officials of the Air Line Pilots Association have said they will accept pay cuts of 26 percent on condition that other outstanding issues are resolved. However, the agreement has reportedly been thrown into doubt by the IAM’s rejection of the takeback demands.

The ongoing losses of these companies, and the general overcapacity and intensifying competition in the industry, are fueling the bosses’ drive for such cuts. US Airways, for example, reported a loss of $269 million in the quarter to June. In 2001 its total loss was $2 billion.

The airline bosses pitch the concessions as necessary to qualify for government loans from the Air Transport Stabilization Board, a body established by Congress under White House direction after the September 11 attacks. On July 10 the board gave conditional support to a $900 million loan guarantee to US Airways that would enable the airline--the country’s sixth largest--to gain $1 billion in private financing, but only if it carried through the wage and benefit cuts.

For its part, United has requested $1.8 billion worth of government guarantees for the $2 billion in private loans that it is seeking. Federal backing means the government will be responsible for 90 percent of a given loan if the airline defaults.

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