NWA family scope during bankruptcy

[Mel Sharples]

The following is from yesterday's edition of the Minneapolis StarTribune:

A Wall Street analyst said Monday that he doubts Northwest Airlines and the pilots union can reach a concessionary labor agreement by Oct. 24, and he warned that without labor cuts soon, the carrier faces a possible bankruptcy filing.

"We think Northwest's current cost structure is unsustainable and the lack of an agreement would likely force Northwest into Chapter 11," Daniel McKenzie, an analyst for Citigroup Smith Barney, said in a Monday report in which he recommended that investors sell their Northwest shares.


So here's my question... If filing bankruptcy allows the court to void contracts once a company files for Chapter 11, how does that affect scope?

What I'm getting at is that maybe that is a way for NWA management to get around scope. If they file for bankruptcy and the judge voids all or parts of the pilots' contract, would that allow NWA to give 70 seaters (or bigger) to Pinnacle, Mesaba, and/or another airline? I honestly don't know and am curious what you guys think.

For the record, I have not heard this will happen and there may be legal protections so that it can't. I don't pretend to be a contract expert but I did think this is an interesting twist.

So, what do you guys think???




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[fly4ever]

NWA is a long way from filing chap 11. Even if chap 11 happens it doesn't mean that the judge automatically voids labor contracts. The company has a responsiblity to their employees and judges do not look highly on companies that file just to void contracts.

Also, most, if not all, NW pilots are fully aware that a concessionary "agreement" will happen. It's not a matter of if but when and both sides know how to take it to the wire in the negotiations to get the desired results.

BTW, NW pilots received by mail(ahead of time) their info to vote on whatever agreement may be put before them because it has been indicated that if a vote is to take place it will have to happen quickly.

 

[Paul R. Smith]

The following is from yesterday's edition of the Minneapolis StarTribune:

A Wall Street analyst said he warned that without labor cuts soon, the carrier faces a possible bankruptcy filing.


So, what do you guys think???

I think I hear this every 2 weeks about some airline.