US Airways Workers Protest Negotiations

Six weeks after its bid for Delta Air Lines collapsed, US Airways President Scott Kirby says the company's top priority in 2007 would be to settle its union labor contracts and finish combining operations with America West Airlines.

"This is by far our biggest issue," Kirby said at the carrier's annual media day. "Though morale hasn't changed, everyone I talk to says, 'When are we going to get our contracts done?'"

He has a lot of work to do.

While Kirby and other executives chatted with reporters and showed off the company's new uniforms Wednesday, pilots and flight attendants lined up along the sidewalk outside the company's headquarters to protest negotiations that have dragged on for more than a year.

"Management needs to wake up and get this merger done properly," said Gary Richardson, president of the local council of the Association of Flight Attendants, which represents America West flight attendants. "We've been negotiating since January 2006, and they've gone virtually nowhere."

Across the street, a dozen pilots in uniform marched in single file, carrying signs proclaiming that management's millionaires are "pilot subsidized."

"We're tired of them dragging out negotiations," said Tania Bziukiewicz, a US Airways pilot and union representative. "Until (Chief Executive Doug Parker) puts the airlines together and he includes all his labor groups working together under a contract as one unified group, he's not going to capture all his synergies, he can't run a smooth operation."

Bziukiewicz and other union members said US Airways was too enamored with its $9.8 billion hostile bid for Delta Air Lines , which fell apart Jan. 31. Not only did its quest for Delta derail union negotiations, she said, it sucked up energy that could have been used to complete its previous merger.

The carrier has finally solved a computer glitch that shut down hundreds of check-in kiosks around the country when US Airways combined its reservation systems with America West's on March 4. On Wednesday, Kirby said the long lines at ticket counters are now gone, and the problem is "99 percent" fixed.

The Tempe-based carrier has otherwise done extremely well since America West acquired US Airways and took its name in November 2005. The company boosted profits last year, and Kirby said US Airways has benefited from almost $1 billion in additional revenue, cost savings and other synergies.

As a result, the company mailed almost $59 million in profit sharing to employees Wednesday.

Nevertheless, pilots, flight attendants, machinists and fleet service workers have refused to accept a contract that doesn't give everyone raises.

US Airways has offered to bring all workers up to the America West contract, which is generally considered to have better pay and work rules than the former US Airways contract.

But that would force former America West workers to accept an old contract without any raises.

"Our (pay) rates don't even remotely keep up with inflation," Bziukiewicz said.

Parker said if it succumbed to the pilots demands, US Airways' annual costs would balloon by about $400 million.

"That's not going to happen," he said.

Combining the Company

By the second quarter of this year, the carrier plans to combine under one operating certificate. If the unions refuse to budge, Parker said management still will be able to pay its workers using separate contracts.

Workers need to realize, Parker said, that management is primarily interested in keeping its salaries "competitive" with other airlines. While US Airways employee contracts aren't the best in the industry, he said, they're also not the worst.

"We're not looking to be the highest-paid" airline, Parker said.

Kirby also said Wednesday that the carrier will focus on prying open new markets overseas as its best bet to boost profits.

"Our intent is to keep growing at two to three (international) routes per year," he said.

US Airways added flights to Milan, Italy; Lisbon, Portugal; and Stockholm, Sweden in 2006. This year, the airline will add service from Philadelphia to Athens, Greece; Brussels, Belgium; and Zurich, Switzerland, Kirby said.

The airline also has applied for federal approval to provide nonstop service from Philadelphia to Shanghai, China.

Kirby told reporters that US Airways won't look to add routes in the United States unless the market changes, allowing it to make more money off of domestic seats.

"It has to be profitable," Kirby said.