A Daily Look at the Airline Industry and the Nation’s Top Seven U.S. Airlines

Bargain-basement airfares have hurt the big carriers far more than the drop in passenger traffic

FORT WORTH (Star-Telegram) - The cheap fares that have devastated the major airlines are unlikely to rise anytime soon, analysts said Wednesday, a trend that could mean continued struggles for the troubled industry.

Atlantic Coast to Lose Flights to Trans States

WASHINGTON (Post) - United Airlines announced yesterday that it reached a deal with a St. Louis regional carrier to operate some United Express flights out of its hub at Dulles International Airport, delivering a major blow to Dulles-based Atlantic Coast Airlines.

Union objects to "force majeure" clause

CHICAGO (Reuters) - The pilots union at Delta Air Lines has filed a grievance with the carrier for using a "force majeure" clause in its labor contract to furlough 250 workers, a union spokesman said on Wednesday.

Decision after US Airways and ALPA unit could not reach an agreement

ARLINGTON (PRNewswire-FirstCall) - US Airways said today that it has notified Bombardier Aerospace that it will not be taking delivery of the 25 CRJ-705 regional jet aircraft ordered in May, and instead, will contract with Mesa Airlines to fly at least 25, and perhaps as many as 55 70- seat regional jets under the US Airways Express name.

Mesa currently has 52 50-seat regional jets under contract of which 49 are currently operating in the US Airways system

PHOENIX (PRNewswire-FirstCall) - Mesa Air Group, Inc. announced today that it has signed a Letter of Intent (LOI) with US Airways for a minimum of 25 and a maximum of 55 CRJ-700 70 seat regional jets. Under the LOI, the aircraft would be provided by US Airways from its previously announced order from Bombardier. All aircraft are expected to be put in service no later then Dec. 31, 2004.

Union: "The company ordered regional jets that were not in compliance with the agreements we had just reached"

CHICAGO (Reuters) - US Airways Group, which emerged from bankruptcy this spring, on Wednesday said it would not take delivery of 25 regional jets in the CRJ-705 line it ordered in May from Bombardier Inc. after failing to get pilots to agree on flying terms.

Loss of pension plan at US Airways a key

PITTSBURGH (Post-Gazette) - US Airways' unionized Pittsburgh pilots have voted 319-150 to remove pilot Tim Baker as local union leader and representative to the Air Line Pilots Association's master executive council.

Item 1. In a press release today, US Airways announced that it will not take delivery of the 25 Bombardier 75-seat CRJ-900 Series 705 small jet aircraft it ordered in May, which violated the maximum small-jet weight and seat limitations of the July 2002 Restructuring Agreement. The Company stated it will instead contract with Mesa Airlines to fly at least 25, and possibly up to 55 70-seat small jets that do comply with the pilots working agreement. The total number of aircraft being ordered and to be operated under US Airways code will not change according to the Company's and Bombardier's issued statements. There will be no reductions in jet for jobs positions, contrary to the Company's public statements.

Bruce Ashby, president of US Airways Express, made several irresponsible statements in the Company's press release today suggesting that US Airways is taking punitive actions against furloughed mainline pilots as well as wholly-owed pilots. These statements focused on assigning blame to ALPA for forcing the Company to comply with the pilots working agreement.

ALPA required US Airways to bring its aircraft order into compliance with the scope provisions in the July 2002 Restructuring Agreement. Despite the Company's ramblings in its press statement, the total number of aircraft ordered and jets for jobs positions available to APL pilots do not change.

US Airways' attempt to force additional small jet authority through an aircraft order and then fabricate the notion that this would create additional jets for jobs positions was one of many attacks on your contract. Violations of scope provisions put additional pressure on current mainline pilot jobs and cause delays of mainline pilot recalls.

There were several other statements made by Bruce Ashby in the Company's press release that were extremely misleading. ALPA and US Airways never entered into negotiations to consider permitting operating the CRJ-900-705 aircraft at other airlines. These aircraft exceeded the agreed-to limits. MEC Chairman Bill Pollock reminded management that authority to operate these aircraft on the mainline remained available.

This issue is part of the much larger issue concerning US Airways disloyal administration and systemic non-compliance of the pilots working agreement. With a record 235 grievances pending, the MEC has been taking steps as part of a comprehensive program to bring US Airways into compliance with the working agreement, as well as resolving other outstanding issues.

For the first time since US Airways entered and emerged from bankruptcy, it has been forced to comply with an important provision of the pilots working agreement. This is only the beginning. Expect further information on a restore compliance initiative being implemented during the upcoming weeks.

Item 2. The MEC held a conference call meeting this evening to receive a report and letter of agreement from the Negotiating Committee on resolving issues concerning the vesting of stock for pilots retiring or at death. Recall that the MEC passed a resolution on May 21 directing the Negotiating Committee to enter into discussions with management to conclude a letter of agreement to address the vesting and timeline for pilot stock distribution as well as ensuring death or retirement does not interfere with a pilot’s unvested shares. At the second quarter meeting last month the MEC accepted an accelerated vesting scheduled which allowed 50% of the allocated stock to vest on the first vesting date (which will be established by US Airways) then 25% to vest on 1/1/05 and 25% on 1/1/06.

Resolving these issues has resulted in protecting pilots' unvested shares through enhanced vesting provisions, instead of pilots being exposed to total forfeiture of unvested shares at time of retirement or death.

Consistent with the MEC's charge and the membership ratification of the stock allocation method, the MEC determined that LOA 89 satisfactorily resolved all outstanding vesting issues. The MEC accepted the agreement. The timeline for finalizing the allocation method can now progress as previously agreed to with the Company in preparation for stock distribution. A copy of the agreement is being posted on the MEC website.

Please remember we have 1,879 pilots on furlough.