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August 27, 2002
US Airways Reneges on Tentative Agreement Between Subsidiary Allegheny and Its Pilots
WASHINGTON, D.C.---In a strange turn of events, the US Airways Group, Inc. has forced Allegheny Airlines and its pilots, as represented by the Air Line Pilots Association, International (ALPA), out of a tentative agreement (TA), based on an issue related to successorship. The TA was reached on August 11, 2002, to address the US Airways Group’s restructuring plan.
While the US Airways Group has made no specific indication that it plans to sell Allegheny, a wholly owned subsidiary, the Group says it will withdraw the tentative agreement unless the successorship clause can be amended. As agreed to, the clause states that if Allegheny is sold or if any transfer or change of control of the company is implemented, with the exception of a merger with another wholly owned subsidiary, the original terms of the Allegheny pilots’ contract would be reinstated.
Allegheny and its pilots have conducted contract talks since April 2002 to address the US Airways Group’s weakening financial position. The Group received approval for a $900 million guarantee of a conditional $1 billion Air Transportation Stabilization Board loan, subject to certain terms including the seeking of concessions from its employees. On August 11, 2002, The US Airways Group filed for Chapter 11 bankruptcy.
Acting Master Executive Council Chairman John Carlisle, leader of ALPA’s Allegheny pilot unit, stated, "We’re perplexed by this last-minute change in position. Pulling the tentative agreement from the table leads us to wonder if US Airways wanted Allegheny and its pilots to have this deal in the first place."
Allegheny Airlines operates as a US Airways Express carrier and serves 38 cities in twelve states in the eastern United States with over 380 daily flights.
ALPA is the world's oldest and largest pilots union, representing 66,000 members at 43 airlines in the U.S. and Canada. Visit the ALPA Website at http://www.alpa.org.
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ALPA CONTACT: John Perkinson (703) 481-4440