Flight attendants at US Airways have approved a concession agreement that will help the bankrupt airline save USD$94 million annually as it tries to cut costs and survive.

The vote by the Association of Flight Attendants was welcome news for the airline, which earlier on Wednesday faced unwelcome developments from two competitors that compounded the challenges already clouding US Airways' long-term prospects.

Delta Air Lines announced fare cuts that could further heat up competition in eastern markets and erode US Airways' ability to generate enough revenue during its uphill struggle to reorganize and attract investors.

Low-cost Southwest Airlines announced it would begin serving Pittsburgh this year, cutting into one of US Airways' important markets. Southwest's push into Philadelphia last year helped drive US Airways back into bankruptcy last September for the second time in two years.

In addition, there was little headway reported on Wednesday in talks with another big labor group, the machinists union, over another USD$300 million in concessions.

A bankruptcy judge in Virginia is scheduled to rule on Thursday on US Airways' bid to throw out the machinists contract if no concession agreement materializes overnight. The union representing nearly 9,000 mechanics and related workers is the only labor group at the carrier to not yet agree to a new round of voluntary concessions.

Talks have been strained by the major travel disruptions during the holiday period in which hundreds of flights were canceled and mountains of luggage was never processed. Two hundred managers volunteered to help sort out the mess. The airline blamed machinists and other workers who called in sick, while unions bitterly claimed staffing at the airline has been poorly managed.

Without cooperation from the machinists and overall labor cuts totaling nearly USD$1 billion and other relief from vendors and creditors who have demanded the company first wring the mammoth cost savings from workers, US Air will probably lose its only source of cash financing and face potential liquidation as early as this month.

The flight attendants union said 71 percent of its 5,200 eligible members voted on the proposed concession package with just over 63 percent favoring the agreement that cuts pay by 9 percent.

"This was not easy," said Teddy Xidas, president of the US Airways flight attendants unit. "Our members have made tremendous sacrifices over the past several years. With this agreement, flight attendants have given everything they can give."

The ratified agreement must be approved by the bankruptcy court.

Bruce Ashby, a senior vice president for US Airways who headed the negotiations for the company, called the flight attendants vote "enormously important." "We now need to reach agreements with our machinists, fleet service workers and maintenance training specialists represented by the International Association of Machinists," Ashby added.