USAir and striking machinists on Thursday reached a tentative contract agreement that would end the four-day labor dispute and allow the nation's sixth-largest airline to resume full operations by the beginning of next week.
The strike over wage and benefit concessions has forced the struggling carrier to cancel 25% of its flights and may cost a total of $35 million, according to industry analysts. However, the relatively brief strike and USAir's ability to keep most of its fleet in the air will allow the carrier to quickly recover, they said.
Many travel agents reported a noticeable decline in USAir bookings as travelers tried to avoid the lengthy delays and scheduling changes endured by thousands of passengers during the strike. To woo passengers back, the carrier on Thursday offered a one-time "Welcome Back Bonus" of 6,000 miles to members of its Frequent Traveler program who take a USAir flight by Oct. 16.
"They need something to jump-start their customers again," said Tom Nulty, president of Associated Travel Management in Santa Ana.
The announcement provided a modest lift for USAir shares, which rose 87.5 cents to close at $12.50 in New York Stock Exchange trading.
Although details of the agreement were not revealed, negotiators for the International Assn. of Machinists and Aerospace Workers urged their 8,300 USAir members to ratify the contract. If members vote to support the agreement by this weekend, USAir said it would return to its normal flight schedule by Monday.
The proposed contract had the support of USAir executives, who have asked employees for $400 million in wage and benefit concessions this year. So far, only USAir pilots, which did not honor the mechanic's strike, have agreed to the concessions.
"We achieved our goal of reducing costs for both the near and long term," said USAir Chief Executive Seth E. Schofield.
In voting to strike last week, the machinists said they had been asked to accept deeper cuts than other employees. The new agreement, union leaders said, will protect the union jobs and prohibit USAir from retaliating against flight attendants, who refused to cross the strikers' picket lines before a court order forced them back to work.
"There was a lot of relief," said union official Ellen Bruck in Los Angeles after the agreement was announced. "Instead of stress, there are smiles now."
The strike--the first in the airline's history--came as USAir has tried to recover from huge losses--more than $300 million in 1991 alone--and intense competition. Meanwhile, the carrier is seeking an international partnership and cash infusion from British Airways.
Even before the strike, USAir was expected to report a loss during the fourth quarter. Losses during the three-month period may now range from $50 million to $80 million, said industry analyst Samuel C. Buttrick at Kidder, Peabody & Co. in New York.
Buttrick said USAir could ease some of the strike's financial pain if it joins other carriers in a proposed air fare increase. However, some analysts said the carrier might shy away from the increase as part of an effort to rebuild relations with passengers.
"They are going to try to be the friend of consumers," said Remy M. Fisher, transportation analyst at Kemper Securities in Chicago.