January 3, 2003

US Airways Unions Agree to Board Seats and Equity in Return for Concessions

NCEO founder and senior staff member

Employees at bankrupt US Airways have agreed to take concessions in return for four seats on the 15-person board of directors and for restricted preferred stock in the company. Pilots would reportedly get 19% of the company's equity, with other union groups getting a few percent each, totaling 10.8% of the equity. Management would get 7.8%. Machinists Union members could get 4.4% or profit sharing, depending on their election. The stock will be issued as preferred stock, with dividends payable in additional shares. Shares would be redeemed in the 11th through 15th years of the agreement. The stock agreement has received virtually no media coverage (a search on Google found only a few limited stories, and details on the deal have been hard to find; the most useful information came from the union's web sites), in sharp contrast to the coverage United's ESOP got when it was formed and when the company went bankrupt.