US Air Asks Judge for Cuts

US Airways Group Inc. asked a bankruptcy judge Friday to cancel labor contracts with three of its unions and impose much lower pay so it could move ahead with a plan to permanently cut costs, reposition itself as a low-cost carrier and avoid a possible liquidation.

The 120-page court filing also asks the judge to eliminate retiree health benefits and cancel its two remaining pension plans, which provide benefits to its machinists and flight attendants.

The airline is asking the judge to impose new labor contracts with pay cuts ranging from 6% to 27% for various employee groups and work rules that unions say would result in significant job losses.

“If they do not obtain these financial accommodations ... it is highly likely that they will have to begin the commencement of an orderly liquidation” as soon as January, when the airline’s interim financing deal expires, US Airways lawyers said in their court filing.

A hearing on the issue is set for Dec. 2. The airline is continuing negotiations with its unions and will withdraw its request for any union that ratifies a new contract.

So far, the airline has new deals in place with its pilots and its smaller Transport Workers Union. But it is still negotiating with the International Assn. of Machinists, the Assn. of Flight Attendants and the passenger service employees represented by the Communications Workers of America, which collectively represent a majority of the airline’s 28,000 mainline employees.

Unions have been upset about the severity of the cuts sought by the airline, considering that they already made substantial concessions in the first bankruptcy reorganization and that most management employees are taking only a 5% pay cut.