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Tue, Oct 19, 2004

Bankruptcy Judge: US Airways 'Ticking Time Bomb'

Workers Protest Judge's Order For 21 Percent Pay Cuts Through February

"This is a ticking fiscal time bomb."

Those words came from Alexandria (VA) Federal Judge Stephen Mitchell Friday, as he approved US Airways' request for a break on what it pays its workers. Labor negotiations aside, US Airways workers suddenly make 21-percent less than they did a week ago.

The Washington Post quotes Mitchell as saying he "reluctantly" went along with the airline's request, even though it "will result in financial hardship for the employees." The alternative, he said, would be for US Airways to liquidate, putting all workers out on the street for good.

Airline CEO Bruce Lakefield was the picture of a penitent man as he called the compensation cuts a "regrettable but necessary step" in company's attempt to emerge from its second bankruptcy.

On average, US Airways workers make $59,000 a year. After the wage reduction, they'll make an average $46,000.

"This is devastating for us," Roger Holmin, vice president of the flight attendants union, told the Post. "The difference of 2 percent is not going to matter. It will still throw many of our members into personal bankruptcy."

Friday's court ruling also cleared the way for US Airways to work its flight and cabin crews longer and outsource some of its maintenance work.

At Washington's Reagan National Airport, US Airways employees did little to hide their anger at the court order. "Our careers and customers are important to us," they said in leaflets handed out to passengers. "That's why we have made several rounds of pay and benefit sacrifices to save US Airways. Management hasn't done that in the past. And now, management wants lower-paid agents to accept pay and benefit cuts that are nearly three times greater than those asked of management."

FMI: www.usairways.com

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