Northwest Airlines to Seek Bigger Pay Cuts
MINNEAPOLIS (AP) - Northwest Airlines will soon seek bigger pay and benefit cuts from its workers, the airline's chief financial officer suggested.
Bernie Han, citing high fuel prices and a weak fare climate, said Northwest "will probably have a new target announced sometime in the upcoming weeks." The company wants to reach cost-cutting labor agreements with its unions by the end of the year, he said.
Han, speaking Tuesday at the Goldman Sachs Transportation Conference in New York, said there is a "greater urgency to get our labor cost savings in place."
For the past two years, Northwest has said it wants to cut annual labor costs by $950 million. So far, the Eagan-based carrier has reduced its labor costs by $300 million a year by cutting the compensation of pilots and salaried workers.
It remains in mediated contract talks with the mechanics and ground workers unions. In early April, Northwest and the flight attendants union will meet for the first time with a mediator.
In addition to high fuel prices, Han said Northwest is being hurt by the fare restructuring launched by Delta Air Lines Inc. in January.
In trading Wednesday morning, Northwest Airlines Corp. shares rose 11 cents, or 1.6 percent, to $6.94 on the Nasdaq Stock Market. The stock has traded in a 52-week range of $6.51 to $11.83.
03/23/05 10:27 EST
MINNEAPOLIS (AP) - Northwest Airlines will soon seek bigger pay and benefit cuts from its workers, the airline's chief financial officer suggested.
Bernie Han, citing high fuel prices and a weak fare climate, said Northwest "will probably have a new target announced sometime in the upcoming weeks." The company wants to reach cost-cutting labor agreements with its unions by the end of the year, he said.
Han, speaking Tuesday at the Goldman Sachs Transportation Conference in New York, said there is a "greater urgency to get our labor cost savings in place."
For the past two years, Northwest has said it wants to cut annual labor costs by $950 million. So far, the Eagan-based carrier has reduced its labor costs by $300 million a year by cutting the compensation of pilots and salaried workers.
It remains in mediated contract talks with the mechanics and ground workers unions. In early April, Northwest and the flight attendants union will meet for the first time with a mediator.
In addition to high fuel prices, Han said Northwest is being hurt by the fare restructuring launched by Delta Air Lines Inc. in January.
In trading Wednesday morning, Northwest Airlines Corp. shares rose 11 cents, or 1.6 percent, to $6.94 on the Nasdaq Stock Market. The stock has traded in a 52-week range of $6.51 to $11.83.
03/23/05 10:27 EST
