Last-ditch proposal for wage concessions from pilots may not produce deal

US Airways may be just days away from filing for bankruptcy protection if a last ditch proposal for concessions from its pilots does not result in a deal.

The spokesperson for the US Airways chapter of ALPA, Jack Stephan, said that the pilot union is discussing the proposal, but would not disclose details. "I have no idea what (the pilots executive committee) will do with the proposal," Stephan told Reuters. Earlier this week the union rejected a plan for $300 million in concessions.

If the proposal is not accepted, the consensus appears to be that the airline will have no choice but to file for bankruptcy no later than Sunday, September 12. The New York Times has reported that the filing, which would take the airline into bankruptcy court for the second time in two years, is imminent. However, the outcome may not be as positive as it was when the airline emerged from the process the first time around.

Both the Times and the Wall Street Journal reported Friday that the company has no collateral available to put together an interim financing arrangement. Given this situation, the company would be forced to use cash reserves, which would make it much harder to reorganize. If that were to happen, the outcome would be Chapter 7, and liquidation of the airline.

According to the Times, US Airways spokesperson Christopher Chiames has said a final decision on the filing has not been made, but he added, "All along in this process, we've acknowledged that a bankruptcy filing might be necessary."

The pilots union was scheduled to hold an emergency meeting on Friday at the Pittsburgh airport, but whether or not they will accept the proposal is anyone's guess. The airline has said that if it doesn't have an $800 million package of concessions from all its unions this month, bankruptcy would be almost inevitable.

FMI: www.usair.com