Finally, an airline union that gets it...
Posted on Fri, Sep. 02, 2005
NWA pilots to talk cuts
Union says negotiated deal beats insolvency
[size=-1]BY MARTIN J. MOYLAN[/size]
[size=-1]Pioneer Press[/size]
Northwest Airlines' pilots have decided to talk with the struggling carrier about a second round of wage and other givebacks, hoping to keep the airline from filing bankruptcy — which they figure could be just weeks away.
"Northwest is running out of time," said Mark McClain, chairman of the executive council of the Air Line Pilots Association at Northwest. "New labor agreements will be in place this fall — either voluntarily or through the bankruptcy court. We think we can fare better through voluntary negotiations than by having an agreement mandated by a bankruptcy judge."
He expects bargaining will begin next week.
Meanwhile, Northwest continues to try to cut giveback deals with its flight attendants and ground workers. Talks with the airline's striking mechanics and cleaners are in limbo. Northwest has brought in replacement workers to do strikers' jobs.
Eagan-based Northwest is far short of its goal of extracting $1.1 billion in annual wage and other labor-cost givebacks from its employees. The airline has just $265 million from its pilots and $35 million from managers and other salaried employees.
Of late, the carrier has been losing $4 million a day. Since the start of 2001, it has lost about $3 billion on its operations.
Its free cash is down to about $1.7 billion. And on Thursday, Northwest said it expects its 2005 fuel bill, excluding taxes, will hit $3.3 billion. That's a $1.1 billion jump over 2004.
Northwest also says that Hurricane Katrina may lead to fuel shortages because of the damage it did to drilling platforms, refineries and pipelines.
That's not the end of the airline's woes.
Its pensions are underfunded by $3.8 billion. And next month, corporate bankruptcy laws change, making the process much less palatable for companies. Firms will be pushed to work their way through bankruptcy faster, and control of the process could even be wrested from management.
While McClain acknowledged Northwest must reduce its labor costs, he dismissed Northwest's roadmap for extracting some $320 million in additional annual labor savings from pilots.
And other unions must step up to take cuts, too, he insisted.
"We'll talk,'' he said. "But there is a difference between talking and reaching an agreement. We will watch what the other unions do. They will participate. The pilots will not go through a second round alone."
ALPA represents 5,200 active Northwest pilots and 500 others on furlough. Pilot pay ranges from $35,000 per year for first-year pilots to $209,000 for the most senior, although there are no first-year pilots on active status.
Northwest's so-called road map includes reductions in pilot base pay of 22.3 percent, on average, and increased flying, which could result in the loss of about 1,100 jobs.
"That is not where we need to be,'' McClain said. "We're looking at other ways to satisfy their financial concerns without destroying our contract. … We would like to get a deal but we will not do a bad deal in the interest of timeliness. It has to satisfy the concerns of our members."
Of great concern to the pilots are their pensions. If Northwest does enter bankruptcy, it likely would dump its pension obligations on the federal agency that insures pensions.
Martin J. Moylan covers airlines and can be reached at
mmoylan@pioneerpress.com or 651-228-5479.
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