US Airways Group Inc. and its pilots are in the "final phase of negotiations over a new retirement plan and could reach an agreement as early as this weekend, said Roy Freundlich, a spokesman for the Air Line Pilots Association. Mr. Freundlich denied reports of a problem in talks and said he could not understand why the company claimed, in a U.S. Bankruptcy Court hearing Thursday, that there was an impasse. David Castelveter, a spokesman for the company, did not return a call today requesting comment.
Reports indicated that negotiations had stalled over a "target benefit defined contribution plan proposed by the airline that would replace the pilots traditional pension plan. The new plan could cost the company about $900 million over the next seven years, or a little more than half of the $1.7 billion cost of its $1.3 billion defined benefit plan, Mr. Freundlich said. The plan would aim to provide pilots with 50% of their final average pay at retirement age.
The company must reach an agreement with the pilots on the replacement plan before it can shut down the defined benefit plan and hand it over to the PBGC, an essential step for the company to emerge from bankruptcy by end of the month.