US Airways Group Inc negotiated US$100 million more savings from its pilots yesterday, and needs another US$100 million from flight attendants, baggage handlers and mechanics to gain a US loan guarantee and emerge from bankruptcy.
The cuts in pay and benefits for pilots, subject to approval by the Air Line Pilots Association, were expected to meet the least union resistance, analysts said.
Some savings in the agreement also result from work rule changes.
"The pilots weren't the ones I've been worried about," said Ray Neidl, an analyst at Blaylock & Partners LP. "It's the other unions we're waiting on."
The seventh-largest US airline raised its cost-cutting target to US$1.6 billion from US$1.2 billion because low air fares and weak demand prevented it from meeting revenue forecasts. The carrier has lined up most of the savings that will help gain a US$900 million federal guarantee. US Airways shares rose US$0.02 to US$0.52 in New York. The stock has dropped 92 percent this year.
The company is seeking more concessions from all its unions, mainly through benefit cuts and work rule changes. US Airways has proposed US$45 million in additional savings from the mechanics and cleaning workers.
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