Bankruptcy Judge Rules on US Airways Motions

In a Jan. 6 hearing, the federal judge overseeing US Airways' bankruptcy approved the tentative agreement that CWA-represented passenger service agents ratified on Dec. 23 by a 60 percent vote.

Flight attendants, members of AFA-CWA, ratified their proposed agreement Jan. 5 by a 64 percent vote; the bankruptcy court will rule on that settlement on Jan. 10.

For agents, the new contract, which runs through Dec. 31, 2011, calls for an immediate average wage cut of 12.9 percent. The contract includes provisions to restore nearly all cuts in benefits by the end of the contract term and includes wage increases of 13 percent in later years of the contract, with the last increase taking effect January 2012.

Flight attendants will see an immediate 9 percent pay cut with wage increases of 10 percent over the contract term, with the last increase taking effect in January 2012.

The bankruptcy court approved the airline's bid to terminate the defined benefit pension plans covering flight attendants, machinists and agents with service before their plan was frozen in 1991, and to transfer that obligation to the Pension Benefit Guaranty Corp., a federal agency. US Airways will make a 3 percent contribution to a defined contribution 401(k) plan in place of the defined benefit plans; most workers will not see a reduction in their benefits under the PBGC takeover.

The court also approved US Airways' motion to cancel its contracts with the Machinists, but that action would be rescinded if IAM members approve the management proposals now being submitted by the union for membership ratification by January 21.