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USAirways faces shutdown
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March 24, 2000: 7:02 p.m. ET
Salaries, benefits remain biggest issues as strike deadline looms
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NEW YORK (CNNfn) - Talks between US Airways and its flight attendants continued late in the day Friday with just hours to go before a midnight strike deadline.
"A lot of little issues had been taken care of last week and overnight, but the three major issues, wages, job security and retirement...those are still on the table," said Scott Treibitz, a spokesman for the Association of Flight Attendants union said.
US Airways said earlier Friday that it offered negotiators for its flight attendants new ways to reach a settlement -- but there were few signs of progress that would avoid a shutdown of the nation's sixth-largest airline.
US Airways spokesman Rick Weintraub said late Friday that no new developments had been reported and reiterated that the carrier was prepared to make alternative arrangements for passengers should it shut down operations.
Traffic at the US Airways (U: Research, Estimates) terminals at LaGuardia airport remained moderate late Friday with few passengers showing up early in case of a strike, said Alan Hicks, a spokesman for the Port Authority of New York and New Jersey.
The head of the flight attendants' union said Friday that despite the company's statement offering a new approach late Thursday; there was nothing new on the table for union negotiators to consider.
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"As of this morning the company has not changed its demands the flight attendants accept cuts," Patricia Friend, president of the Association of Flight Attendants, told reporters at Reagan Washington National Airport Friday morning.
Friend said there was some progress on secondary issues in talks Thursday, but not enough to head off either a series of job actions or a management lockout at US Airways, which operates 2000 flights a day.
 "The large issues remain in front of us," she said.
The company's statement about a new negotiating offer gave few details about the offer.
"To be responsive to the Association of Flight Attendants regarding US Airways' method of calculating parity plus 1 percent, the company ... has offered alternative ways to achieve its goal of a contract that is cost competitive with the major four airlines," said its statement late Thursday.
Other unions representing US Airways workers have accepted the formula of parity plus 1 percent, but the flight attendants say it would result in erosion of their pay and benefits. The carrier's 10,000 flight attendants have not had a raise in four years.
At 12:01 a.m. ET Saturday, a 30-day cooling-off period imposed by a federal mediator ends. The union has promised a series of random strikes under its so-called Chaos campaign while the airline is threatening to shut down all operations rather than suffer flight disruptions.
But neither side may get much chance to flex its muscles. Under the Railway Labor Act, which governs labor relations for airlines, President Clinton can order an end to any work stoppage and appoint a presidential emergency board to settle the dispute. He has done that in some past airline disputes.
 Another option for US Airways customers is its competitors. The company also said Thursday it reached agreements with other airlines and Amtrak to honor its tickets in case of a strike. However, electronic ticket holders or passengers with frequent-flier award tickets would need to contact US Airways to change their reservations.
"Our goal is to get an agreement by midnight Friday and we are singularly focused on that, but in case we do not ... this is one of the steps we are taking to accommodate our customers needs," Weintraub said.
Friend stressed that the union's threat of random strikes was not the threat to passengers that airline officials have made it out to be. She said the union only targeted 49 routes for possible action, and carriers could have chosen competitors on each of those routes. She said when the union used the tactic against Alaska Air in 1993, only seven flights were grounded by strikes over a six-month period.
"The shut down threat is a bad decision," she said. "It was meant as a scare tactic in negotiations, but if it is carried out it will result in the pain and suffering of thousands of travelers and families that rely on this airline for their livelihood." (123KB WAV) (123KB AIFF)
The airline insists the threat of random walkouts by flight attendants left it no choice.
"One flight, one passenger who doesn't get to his or her destination because of Chaos is one too many," said David Castelveter, spokesman for the airline. "For you to not know if a flight is going to operate because of Chaos is intolerable. It is better that we tell you in advance the flight is cancelled."
He would not comment on the details of negotiations, due a request from federal mediators.
Stoppage expected to be short-lived
Many analysts believe a strike or lockout would be short-lived if it occurs.
Ray Neidl at ING Barings said he believes there is still a slightly better than 50 percent chance of an agreement Friday, and he believes Clinton would stop any work stoppage soon after it started.
"He has been pretty active with these emergency boards," Neidl said. "If there is a strike, I think it's highly probable it will be short. If there is no intervention, I think it could drag out for the weekend. At this point I'm assuming logic would prevail, it wouldn't go on much longer than that."
U.S. Rep. Louise Slaughter, D-NY, who frequently flies back to her district on US Airways, called on the White House to intervene in any work stoppage. "I think the government needs to step in and make them fly until they settle this," she said. "The economy of this country really depends on being able to get people and goods where they need to go."
Slaughter, who said she sympathizes with the flight attendants, is keeping her fingers crossed and has not made alternative arrangements.
"If I have to, I can drive," she said.
The White House so far has not announced plans to intervene, but it has never commented before the end of the cooling-off periods in the past, even when it did order the sides back to work.
Wall Street analysts estimate a strike could cost the carrier $25 million a day in lost revenue and bring daily losses of $12.5 million. US Airways is one of the only carriers to lose money in 1999, in what was a very strong year for airlines.
Neidl said that even with a strike and fuel prices being very high US Airways should be able to return to the black this year. He is projecting $1.92 per share earnings for the year, and does not expect to revise his numbers if there is a very short stoppage. Analysts surveyed by First Call forecast only $1.84 a share in earnings for the year. The First Call forecast is for a loss of $1.15 a share in the current quarter.
Pittsburgh, Charlotte to be hit hardest
If there is a disruption, the greatest problems will be in Charlotte, N.C., where U.S. Airways accounts for 90 percent of total air traffic and about 65 percent of passengers not transferring to other flights. In Pittsburgh, its second-largest hub, US Airways accounts for 73 percent of traffic. The strike would also be felt on the Boston-New York-Washington corridor, where its shuttle faces competition from Delta Airlines.
 The only flights that would not be affected by a strike or shutdown would be regional commuter airlines that operate under a service agreement with US Airways, using the name US Airways Express. US Airways, US Airways Shuttle flights and low-cost carrier MetroJet would be grounded by any strike or lockout.
About 10,000 US Airways flight attendants are working under a contract that expired at the end of 1996 and gave them their last pay raise, of 4 percent, at the start of that year.
The starting salary for US Airways attendants is $17,145 a year, while those at the top of the pay scale earn $36,918. US Airways has promised to pay any of its 35,000 other employees furloughed during a shutdown for long as possible.
After being in negative territory much of the day US Airways stock finished Friday down 1-1/16 to 22-3/8. 
- from staff and wire reports
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