Northwest Pilots OK Contract With Pay Cut

[Fallingbrick]

Associated Press
Northwest Pilots OK Contract With Pay Cut
Friday November 5, 11:36 am ET
By Patrick Condon, Associated Press Writer Northwest Airlines Pilots Approve Contract Containing 15-Percent Annual Pay Cut for Next 2 Years

MINNEAPOLIS (AP) -- Northwest Airlines pilots overwhelmingly approved a new contract Friday that gives them a 15-percent annual pay cut for the next two years and allows the company's regional affiliates to carry more passengers.

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http://ad.doubleclick.net/ad/N1627.yahoo03/B1416700.5;sz=300x250;abr=!ie4;abr=!ie5;ord=1099672756924535?" target="_blank">http://ad.doubleclick.net/ad/N1627.yahoo03/B1416700.5;sz=300x250;abr=!ie4;abr=!ie5;ord=1099672756924535?The agreement would let Northwest Airlines Corp. -- which is trying to cut costs to deal with higher fuel prices and tough competition -- boost revenue by adding new regional jets and increase the number of seats in existing small jets.

Of the 4,129 pilots who voted, 89 percent favored the agreement and 11 percent were opposed, the pilots' union announced.

The concessions are part of an agreement between Eagan-based Northwest and the Air Line Pilots Association to generate $265 million in savings as the struggling company attempts to slash its labor costs by $950 million a year.

Union leaders unanimously approved the contract earlier, and recommended that rank-and-file pilots follow suit in order to help Northwest renegotiate a $975 million credit agreement that expires in October 2005. Failure to refinance the deal could have consequences for other credit agreements and for the company's continued financial viability. The new contract won't take effect until after the credit agreement is renegotiated.

 

[lumax]

As soon as employees take a pay cut, executives get a bonus.
The following is posted in the USA Today by Ben Mutzabaugh.


NWA brass hit gold: Northwest's board is distributing $3.7 million in restricted stock to its senior executives. CEO Doug Steenland will pick up 150,000 shares valued at $1.4 million. The move may not sit will with rank-and-file workers who are being asked for additional cuts, and comes as pilots vote on a two-year contract that would cut pay 15% and save the company $265 million a year, the MinneapolisStar Tribune (free registration) observes. Acceptance of the new pilot deal would also mean $35 million in annual cuts for salaried employees. As previously reported, Northwest executives recently received salary increases to reflect new responsibilities, though those increases are now subject to cuts as well. Northwest has lost more than $2 billion since early 2001 and wants $950 million a year in labor cost cuts. "The restricted stock grant program is designed to focus our senior management on the long-term success of Northwest Airlines and to align the executives' interests with those of the company's shareowners," a spokesman said. At the same time, Northwest will be forced to pay more interest on $975 million the company has out in loans, reports the Star Tribune/Bloomberg News. Posted 7 a.m. ET

 

[Ty Webb]

As soon as employees take a pay cut, executives get a bonus.
The following is posted in the USA Today by Ben Mutzabaugh.

Funny thing is that the NWA pilots I run into are often the ones that are most likely to blame us awful LCC pilots for NWA's woes . . . . . Seems their management has done such a great job of convincing them that the LCC's are the problem that they managed to pull off concessions while getting themselves a raise.

Hmmmmmmm.



.

 

[TriStar_drvr]

Does the concessionary agreement have a clause in it that kills the pilot pay cuts the next time NWA management refuses to go along with any fare increase?

By the way, according to the smilies list, the one that I've chosen is supposed to indicate sarcasm...

 

[jumppilot03]

How will this news affect Mesaba and Pinacle? More Jets?

 

[767-300ER]

New NWA pay scale with today's agreement:

http://www.airlinepilotpay.com/nwa/nwa.htm

 

[320AV8R]

Funny thing is that the NWA pilots I run into are often the ones that are most likely to blame us awful LCC pilots for NWA's woes . . . . .

What LCC pilot actions contribute to NWA's woes?

Factors such as high fuel prices, overcapacity, a semi-weak economy, thin yeilds, hefty pension liabilities, high Security taxes, etc are responsible for the woes of NWA, the other Legacy carriers, & LCCs alike. UAL & USAir are in CH 11; one LCC, ATA, is also. JetBlue's revenue is down 71% YOY. Every carrier has "woes", except SWA.

Seems their management has done such a great job of convincing them that the LCC's are the problem that they managed to pull off concessions while getting themselves a raise.

The "problem" is that $975 million in debt was added to the balance sheet this month. The pilot's TA was required in order for the banks to refinance it. Without refinancing, it would restrict almost $1 billion of the $2.5 billion in cash at NWA. That would result in a small amount of "available" cash, and could trigger a CH 11 filing.

Our CEO left last month, & all the Management-types "moved up" a position. (Similiar to Captain from F/O). Their pay will increase relative to their new positions, but they will still take a 15-23% pay cut. The TA stipulates that Management salary can not increase while the TA is in effect, which it has not.

 

[sf3boy]

No new jets for Mesaba or Pinnacle. Some seats may be added to some of Pinnacle' 44 seaters, but nothing more. It does allow for NWA to add Mesa, CHQ, Skywest, Air Wisky, Lakes, and all the US Air regionals (up to 40 planes) if United or US Air goes down for good.

 

[8vATE]

This will be the FIRST pay cut for NWA...


Its only a matter of time before management will come after the pilot group again.....

Look at USAirways.... UAL.....

NWA has some breathing room because of its limited exposure to LCCs and long haul Asia runs it does..... But its only a matter of time......
I suspect they will be a good consolidation partner for someone....

my .02...

 

[Joe Peeoznotz]

This will be the FIRST pay cut for NWA...


Its only a matter of time before management will come after the pilot group again.....

Look at USAirways.... UAL.....

It looks like they will begin negotiations in February on a 70 seater to be flown by NW pilots at a B scale. Sounds to me like the seniors traded off a reasonable pay rate reduction for now for an attritional large reduction for many juniors as the 9's are retired. My guess is the 70 seater may also include the 190 at some point.

 

[Monster Buck]

No new jets for Mesaba or Pinnacle. Some seats may be added to some of Pinnacle' 44 seaters, but nothing more.

Correct me if I am wrong but the agreement only applies to adding more 50 seat ac, NWA has some 150 or so more options that they can use for 44 seat jets. Again NWA, Pinnacle, or Mesaba can get more 44 seat jets no matter who pays for them, just not any more 50's than what was negotiated in the current agreement.

 

[Schwanker]

It looks like they will begin negotiations in February on a 70 seater to be flown by NW pilots at a B scale. Sounds to me like the seniors traded off a reasonable pay rate reduction for now for an attritional large reduction for many juniors as the 9's are retired. My guess is the 70 seater may also include the 190 at some point.

Almost correct. There will indeed be a "B" scale contract for these 70 seaters for mainline pilots. The catch is there will still be a mainline floor on fleet size which will be required to be maintained so these aircraft can not replace the DC-9. The "non B-scale" fleet will not get smaller, in fact it will be required to grow if NWA brings on these B-scale aircraft. The result will be these new smaller aircraft will turn into new hire positions and will be a "flow-back" position in the event of furlough. All of the NWA seniority list pilots should be recalled by the end of 2005 (Spring 2006 worst case) on current projections. By the time NWA can acquire any of these aircraft, it will be new hires flying them. Not a bad new hire position as attrition alone should advance pilots into mainline equipment relatively quickly. The main point being is this really can't be a DC-9 replacement program unless mainline grows substantially (ie..lots of new 319s/320s...). Any DC-9 retirement would have to be equalled by another narrowbody acquisition for the B-Scale to remain in place on the 70 seater. A trade many are willing to make.

The official position of ALPA and via the contract, 90 seaters would be mainline aircraft at mainline pay and mainline bennies. We'll see, but maybe ALPA will trade this for other mainline growth GUARENTEES. At this point, they will not give away this flying.

Schwanker

 

[320AV8R]

This will be the FIRST pay cut for NWA...
Its only a matter of time before management will come after the pilot group again.....

Yea, like in two years.....when our Contract expires.

Look at USAirways.... UAL.....

For what ? Bad Management ?

NWA has some breathing room because of its limited exposure to LCCs and long haul Asia runs it does..... But its only a matter of time......

Let's see....SWA & Spirit in DTW....ATA, AirTran, AWA in MSP......and UAL is larger than us to Asia.....Huh ?

I suspect they will be a good consolidation partner for someone....
my .02...

Good thing you're ony wagering 2 cents......who has the money to buy us....and what bank would lend whomever the money ?!!!!