In what should come as no surprise, the Pittsburgh Post-Gazette is reporting today that USAirways is seeking $300 million in cost cuts from its pilot's union. Here's the link:

http://www.post-gazette.com/pg/04139/317907.stm

We'll see how quickly this proceeds.

Cheers,
Dave in Orlando

Won't happen...looks like they are, as they have been, getting desperate. They need to downsize and spread out a little more.

Pilots will actually probably have a TA in a month...things are very positive from what it looks like.

Slowly but surely things will get better at US. I think they are seeing the big picture of not having a job. Take the cuts and keep your job, even a low paying job is better then no job.

Looks like the only way for US to survive is for every employee to work for $6 an hour. This is getting bad. Well we will see what the pilots do.

I bet that will go over like a lead balloon.

Hopefully, the pilots will respond.

N

Looks like the only way for US to survive is for every employee to work for $6 an hour

Or put them all on RJ payscale.....  

I can't imagine how it must feel to be a US employee right now

I know one, it's not good. I feel for him and I hope he can find a good job!

Go MATT!!!

I can't even begin to imagine. I mean, if I had already taken one pay cut, one huge paycut, I don't think there is anyway I could possibly give another one. Even if it might cost me my job. I feel for everyone, and hope that they can work something out.

Whats the problem with the RJ payscale, I know lots of RJ guys who live very comfortably and they fly the RJ. You certainly don't need to make $25 hr to have the good things.

Leaping anacondas $1,500,000,000.00 in additional cost cuts for the airline. That would indicate to me anyway, that there is something way wrong in the ivory towers that manage US. To let costs get that far out of line involves more than what is going on with the employees wages.
I have not been following US that closely but really not another word about how US is going to cut costs other than wages, cutting back at PIT and a few lay offs. US has not really made public much about their future business plans. Kind of hard to rally the troops if there is no direction from the top.

Okie

1 billion 500 million....are you reading that right?? or am I not reading it right?? I have seen some numbers but nothing that was that high.

According to the linked article its 1.5 BILLION in cost cuts.
I think that is more than can be put on a Mastercard.

Okie

But if you use the US Airways gold Mastercard you can get frequent flyer miles with your purchases!!!!. That would add up to a lot of free tickets!!! I believe you are right I didn't see the whole article, I only saw the pilot work group amount, I didn't see the others, Im sure it can be done over time but definatly not overnight. I smell more express operations taking over the mainline flying and being done much cheaper, thats where it can be done and the planes flying it will still carry the USAirways colors eventhough it will not be US (it will be Mesa, Chatauqua, Trans States, ect.)

Kinda reminds me of the oil bust in the mid 80's when all the financial institutions went belly up.
Buy a toaster get a free bank.

Okie

The pilot's union chairman said "We are at the point where this is what they say they need, and we will do our job to challenge every part of it to see whether we agree with them."

Now, I'm hoping that he didn't mean to be confrontational, but using the words 'challenge every part of it' sure will be interpreted that way. Here's to hoping that the union pulls their heads out and behaves like adults to save their own skins.

I certainly feel for these guys at USAirways. I remember when I worked at Eastern and we had to take 20-25% paycuts in an effort to survive. I remember about 2 weeks before I quit (after 8 yrs), management walked by and handed all the employees 2 brand new $100 and said thanks for a job well done. I said is this what my 25% give back is getting me? 3 months after I left the rest is history.

US pilots and all employee groups need to make sure more givebacks are needed and ALL options are being looked at, including the proper cutbacks by those in their "ivory tower". Afterall, it should be a team giveback from the top down. I would hate to see the pilot group give back more if upper mgmt isn't.

Swardu-

interesting post-very honest-that's the way the capitalist system words-but I find it interesting that you are now working for SWA-Don't you agree that one reason SWA is healthier than the legacies is that is has a less agressive union and younger employees? If your union was as agressive as the union at Eastern what would happen.

BTW Unions have the right to do what they will-but Unions generally look at the short term picture while management must look to the long term

And they continue to beat a dead horse. Seriously, how much money can the employees give back to the company? I'm sure that morale is real high at U.S. Airways right now. They've tried so many gimmicks to make money, and they dont work. Do any of the employees still have pride in their company these days? U.S. will be tits up in Chapter 7 by years end.

The reason why the cost cutting is so drastic is that they are trying to get the airline down to a "6 cent" airline - IOW...JetBlue/Southwest. The bulk of the cuts or savings if you will, will come from the completely revamp of the flight network. Most flying on short hops will go to RJ or E-Jet flying, allowing the Boeings and Airbuses for long haul flying - reducing costs by having a more efficient fleet. There move towards to a point2point network from the major cities out east will also be a huge plus for them.

I have to feel bad too for the US employees too, but when they charge ridiculous amounts of $$ for a ticket I don't feel so bad for them. Then WN comes to PHL they are forced to drop their prices on the routes that WN flies to and lose money. They need higher aircraft utilitization and I think to start some point to point service if they even have a chance.

Freshlove1:

You certainly don't need to make $25 hr to have the good things

I hope that's a joke. $25/hour to fly a transport category airplane is not a decent wage. Try raising a family on it.

Scooter

I know many, many, many people that raise their family on $25/hr or much, much less.


The reason I don't feel sorry for the US employees is that they have a job. In this economy, there are lots of overqualified folks that don't.

N

Remember there are cost of living issues. I was running some numbers lately for our business in trying to recruit from Silcon Valley, LA and New York compared to Omaha where we are. I could pay a New Yorker HALF of what he is making and he would have the same standard of living. For LA and the Bay Area it was about 65-70%.

$25/hour full time is ~$50k per year. In Omaha and many other places, that is just fine. If you live on the coasts, it is significantly less.

Incidentally, the median household income in the US is $40k. $50k is starting to bust out of "upper middle class", isn't it?

Remember $25/hr for a pilot is not the same as $25/hr for a "normal" person.

Pilots are restricted to 100 hrs per month and 1000 hrs per year by the FAA. That averages to around 83 hours per month (if you dont want to give the pilot December off!!!)

Assuming a "normal" person works 40 hours per week, they would then work 160 hours per month.

So lets say that you pay a pilot $25/hr. That would equal, approximately, $25,000 per year.

The "normal" person who makes $25/hr would make almost $48,000 per year!!!

Thats a BIG difference. Pilot hourly pay-rates almost ALWAYS equal just 50% of the equivilent payrate in a non-flying capacity simply due to FAA restrictions.

BTW Unions have the right to do what they will-but Unions generally look at the short term picture while management must look to the long term

Actually, the fact is that Unions are looking to protect their power, while the corporations generally look at the next 90 days. So in both cases, I would say your characterization is wrong.

U.S. will be tits up in Chapter 7 by years end.

I'm sorry to say, but I agree with you on that. USAir is having so many problems; their CEO just quit; and now they need even more cuts? Things do not look well. I wouldn't expect them to last more than another year without a bankruptcy filing of some sort.

Most flying on short hops will go to RJ or E-Jet flying, allowing the Boeings and Airbuses for long haul flying - reducing costs by having a more efficient fleet. There move towards to a point2point network from the major cities out east will also be a huge plus for them.

The problem is, while they are reducing their costs, they are also reducing their throughput, and as a result their revenue stream. So they spiral downward, their costs coming into line with what they think the costs should be, but the revenue dwindling along with it. Eventually, you're left with a zero-cost but zero-income airline.

I know many, many, many people that raise their family on $25/hr or much, much less.

Perhaps, but they're probably working more than 60-100 hours a month. All those federally mandated rules about how long pilots are allowed to fly and all that, really cuts into their paychecks!

$25/hour full time is ~$50k per year. In Omaha and many other places, that is just fine. If you live on the coasts, it is significantly less.

True, but it's still livable. You even said, the "average" person in this country earns significantly less than that. But remember, pilots don't work full-time hours. Because of the work rules, they are limited in the number of flight hours they can work in a week, and most pilots are only paid while the plane is in the air.

The "normal" person who makes $25/hr would make almost $48,000 per year!!!

Actually, in the US, the "normal" full-time employee works around 2200 hours a year (that's right: We work more hours than *anyone* except the S. Koreans!). That means an "average" someone earning $25 an hour would earn $55K without overtime pay! A pilot, OTOH, as you said earbs about $25K.

Honestly, I think the pilots are the most likely of US Airways' labor groups to give the concessions requested by the company? Why? Because staying at US Airways and making even only $75,000/year is a heck of a lot better than starting over as a first-year FO at Mesa or Chautauqua or Comair or SkyWest at $20,000/year. There are few jobs out there where a newly unemployed pilot can make anything approaching what he or she would make, even post-concessions. That may sound brutal, but it's the truth. And the doom-and-gloom machine at the airline is turned up to sufficient volume to have the pilots scared $#!+less. That's why they agreed to give up so much flying to the regionals -- sacrifice the low-seniority pilots to keep high-paying jobs for the ones at the upper end.

I think that management is going to have a far tougher time getting the concessions it wants out of the flight attendants and mechanics. The mechanics are clearly very, very angry about what they see as an egregious violation of their contract in the company outsourcing heavy maintenance of the Airbus narrobodies, and they probably have the most easily portable skill set of any of the groups. I think their view is basically, "why should we agree to modify our contract when management hasn't bothered to honor it in the first place?" As for the flight attendants, the magnitude of the proposed cuts (as far as I've seen) would put them at or below the regional carriers like American Eagle and Mesa -- so what's the point in saving the job when the pay's going to be terrible.

I'm still a bit unclear as to why the company needs $1.5 billion in new concessions/cost cuts when last quarter's operating loss (and the first quarter is always the weakest of the year) was under $150 million. Annualizing that number only comes out to $600 million (and the analyst estimates are closer to a loss of $500 million), and the difference between the target and the $800 million in labor concessions works out to $700 million -- more than what's expected for losses this year. I've said this on another board -- the company's non-labor, non-fuel costs are nearly 5.5 cents/mile, so how do they become a 6-cent airline without dramatically improving those first?

"I've said this on another board -- the company's non-labor, non-fuel costs are nearly 5.5 cents/mile, so how do they become a 6-cent airline without dramatically improving those first?"

Which is precisely the quandary we have been seriously addressing all this week in this thread.