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NW Warns BK Looming

JoeMerchant

ASA pilot
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Mar 31, 2005
Posts
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AP
Northwest Warns Bankruptcy Looming
Thursday September 1, 7:38 pm ET
By Joshua Freed, AP Business Writer Northwest Airlines Warns of Up to $400M Loss, Says Time Running Out to Avoid Bankruptcy

MINNEAPOLIS (AP) -- Northwest Airlines Corp. warned on Thursday that it is running out of time to avoid bankruptcy because of spiking fuel prices, and that it will lose as much as $400 million this quarter. Company pilots said they would negotiate a new round of pay cuts.

The carrier said in a filing with the Securities and Exchange Commission that its cash had fallen to $1.7 billion as of Wednesday, down from $2.1 billion on June 30. Some of the decrease was due to holdbacks required by the company that processes its credit card transactions, a situation that has also squeezed rival Delta Air Lines Inc. in recent weeks.

Northwest said it expects to pay $1.90 to $1.95 per gallon of jet fuel, for a total of $900 million for the quarter. It expects to spend at least that much in the fourth quarter, for a total of $3.3 billion for all of 2005. That's a 50 percent increase over the $2.2 billion it spent on fuel in 2004.

Northwest mechanics are on strike, but the nation's fourth-largest carrier has continued to fly by using replacement workers. On Thursday, it said the strike has not had a significant impact on revenue.

Northwest said it has run out of collateral for additional loans.
 

320AV8R

DUMP ALPA
Joined
Oct 15, 2003
Posts
505
Total Time
2 much
The sky is falling......................

ALPA will concede to more cuts to avoid CH 11.....if that's possible....

Management is gettin' ready to screw the scabs as well. On monday, their transportation and housing benefits will be yanked. Wow...hire scabs and then Fukk them too......these guys are good.

Livin' the dream,

320AV8R
 

klhoard

Well-known member
Joined
Mar 14, 2003
Posts
766
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32000+
320AV8R said:
Management is gettin' ready to screw the scabs as well. On monday, their transportation and housing benefits will be yanked. Wow...hire scabs and then Fukk them too......these guys are good.

320AV8R
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And the SCABS should be surprised?? It's like stealing your buddy's wife then getting pissed when she cheats on you. . .
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.
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TFB
.
.
.
 

JoeMerchant

ASA pilot
Joined
Mar 31, 2005
Posts
6,353
Total Time
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AP
Northwest: Time Short to Avoid Bankruptcy
Thursday September 1, 9:22 pm ET
By Joshua Freed, AP Business Writer Northwest Airlines Warns of Up to $400 Million Loss, Says Time Running Out to Avoid Bankruptcy

MINNEAPOLIS (AP) -- Northwest Airlines Corp. warned on Thursday that it is running out of time to avoid bankruptcy because of spiking fuel prices, and that it will lose as much as $400 million this quarter. Company pilots said they would negotiate a new round of pay cuts.

The carrier said in a filing with the Securities and Exchange Commission that its cash had fallen to $1.7 billion as of Wednesday, down from $2.1 billion on June 30. Some of the decrease was due to holdbacks required by the company that processes its credit card transactions, a situation that has also squeezed rival Delta Air Lines Inc. in recent weeks.

Northwest said its third-quarter loss would be $350 million to $400 million, but possibly worse depending on the financial impact of Hurricane Katrina.

Eagan-based Northwest has been seeking $1.1 billion in annual labor cost savings. It said it will probably increase that target, partially because of rising fuel prices, though the company didn't offer a new dollar figure.

Northwest said it expects to pay $1.90 to $1.95 per gallon of jet fuel, for a total of $900 million for the quarter. It expects to spend at least that much in the fourth quarter, for a total of $3.3 billion for all of 2005. That's a 50 percent increase over the $2.2 billion it spent on fuel in 2004.

Northwest mechanics are on strike, but the nation's fourth-largest carrier has continued to fly by using replacement workers. On Thursday, it said the strike has not had a significant impact on revenue.

Northwest said it has run out of collateral for additional loans.

Pilots said Northwest's financial troubles are driving them back to the bargaining table.

"We feel that the threat of bankruptcy is high," said Capt. Mark McClain, chairman of the Northwest branch of the Air Line Pilots Association. "If we can avoid bankruptcy, we feel that we can get a better settlement in negotiations voluntarily with Northwest management than we can get through the bankruptcy court."

Northwest is in talks with flight attendants and ground workers. But only the pilots have agreed to pay cuts, accepting a 15 percent cut last fall that contributed $300 million in savings toward Northwest's $1.1 billion goal when combined with a cut for managers.

The pilot talks are voluntary; their pay-cut agreement last year called for Northwest to avoid asking for additional cuts until other unions had also agreed to concessions.

In the SEC filing, Northwest repeated its claim that it needs pension law changes and employee pay cuts to avoid a Chapter 11 filing.

"As a result of the recent spike in jet fuel prices, the time period for the Company to resolve these problems has been reduced," it said.

Northwest shares fell $1.06, or 21 percent, to $3.97 on the Nasdaq Stock Market before its SEC filing. Its shares dropped another 26 cents, or 6.5 percent, in late trading.

Also Thursday, striking mechanics tried to block buses taking replacement workers to Minneapolis-St. Paul International Airport. At three hotels, strikers chanted "scabs go home" and "scab hotel." One striker was arrested and cited for blocking traffic.

Ted Ludwig, president of the Minneapolis local of the Aircraft Mechanics Fraternal Association, said the aim was to disrupt shift changes at Northwest. Airline spokesman Kurt Ebenhoch said the shift changes happened as planned.
 
R

RoyalAviation2

The time to start drawing the line came.........and past some time ago. When will the unions and workforce of this industry stand up to mgmt and say enough is enough. The other option to taking more pay cuts is to hike ticket prices which airlines used to do some time ago. The only reason they won't do it now is they're afraid the LCC's will take their business. How many more pax can the LCC's take?
 

ironspud

Well-known member
Joined
Feb 26, 2005
Posts
431
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>20000
Good articles and points to both Joe and Royal.


Times have changed.
 

Deli Guy

Well-known member
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googol
Times have changed. I really think there will be better times, but they will be at reduced pay and benifits. I am standing by labor. I want Alpa to pull a rabbit out of its hat. I just do not think they are going to be able to.
 

JoeMerchant

ASA pilot
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Posts
6,353
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Deli Guy said:
I am standing by labor. I want Alpa to pull a rabbit out of its hat. I just do not think they are going to be able to.

Forget pulling a rabbit out of it's hat, I would just settle for ALPA pulling it's head out of it's A$$.
 

Dodge

Four engines are nice
Joined
Nov 28, 2004
Posts
474
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6000+
320AV8R said:
The sky is falling......................

ALPA will concede to more cuts to avoid CH 11.....if that's possible....

On monday, their transportation and housing benefits will be yanked. Wow...hire scabs and then Fukk them too......these guys are good.

Livin' the dream,

320AV8R

Does this mean that they will be riding the employee parking bus to the employee parking lots?
 
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