Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, July 29, 1995                   TAG: 9507310059
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A5   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: ARLINGTON, VA.                                 LENGTH: Medium

USAIR CALLS OFF LABOR DEAL

The Arlington-based airline took its offer off the table Friday after the flight attendants' union this month rejected the tentative deal negotiated with pilots and machinists.

USAir will pursue savings of $500 million a year from labor through collective bargaining with each union separately, spokesman Rick Weintraub said.

``It's just a more traditional way of doing it. We had hoped to do it another way, but now we will be starting with a clean slate,'' Weintraub said.

The wage concession and restructuring package traded greater job security and equity stakes in the airline for lower labor costs. All three unions had to agree before the deal could go forward.

The Air Line Pilots Association voted in March to accept the deal, but several issues were unresolved. The International Association of Machinists struck a similar deal, but postponed ratifying it after trouble developed with the flight attendants' deal.

``It would be unfair to point fingers in any one direction, and we certainly aren't,'' Weintraub said.

Attempts to reach officials of the three unions by telephone were unsuccessful Friday night.

USAir has said it needs to cut $1 billion a year in operating costs over five years. Half the savings are supposed to come from management and half from labor.

The airline last week reported second-quarter earnings nearly eight times higher than last year, boosted by industry conditions and cost reductions.

The carrier earned $112.8 million for the quarter ended June 30, compared to $13.8 million a year ago.

Weintraub said USAir would cut almost $400 million from its cost structure this year and close to $500 million next year.

USAir chairman and chief executive officer Seth Schofield acknowledged the company's stronger financial position played a role in ending the wage concession talks.

``Changes in the industry, and our success in sharply cutting non-labor costs, give us the resources and the determination to take other avenues,'' he said in a statement released by USAir late Friday.

Cost-cutting will continue, Weintraub said.

``The ultimate goal remains the same, absolutely,'' he said.

USAir will negotiate separately with the three unions when their contracts come due in the next two years, Weintraub said.

The machinists, representing 8,300 mechanics and 6,500 service workers at USAir, have a contract that comes due in October.

The ALPA, representing 5,100 pilots is next, in May of next year. The Association of Flight Attendants' contract, covering 8,300 workers, is up for renewal in 1997.