US Airways’ cutting $45 million in management jobs and cost reductions is its latest move towards the emulating the business model of low-cost carriers such as JetBlue and America West.
The airways says it is slashing management costs by 20% in a serious effort to survive bankruptcy.
The $45 million in cuts will take place at facilities all across the country.
“These savings….are consistent with our projected status as a successful low-cost carrier,” the company said in a notice to employees.
The troubled airline’s future was also in the hands of its pilot’s union. The airline took a crucial step to securing another $300 million in concessions when leaders of the labor group said they would forward a plan to cut wages and benefits to pilots for a vote.
US Airways filed its second bankruptcy petition in two years 12 September after unions declined to grant $800 million more in wage and benefit reductions.
The company’s senior officers, including its top 10 managers, are taking cuts averaging 17%. The airline is also reducing its contributions to pensions.
The airline’s management work force will be cut from about 10% of its current level of 3,700, the company said.
Reports are that the airline on Thursday will ask a bankruptcy judge to impose temporary pay cuts of 23% on all union workers, as well as reduced retirement plans.
The CEO, Bruce Lakefield, is not taking a pay cut because his compensation of $425,000 a year is already below the level at low-cost carriers, according to US Airways.
Report by David Wilkening
