NWA Group

[cfm56-7b]

Northwest Pilots Have Most to Lose
Friday September 2, 5:17 pm ET
By Joshua Freed, AP Business Writer

Northwest Pilots Have the Most to Lose if Airline Goes Bankrupt, Dumps Its Pensions.

Should have supported other uinions.

 

[GVFlyer]

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 [email protected] or 651-228-5479.






GV








~

 

[FOrever85]

They could fly for free and Northwest would still go into bankruptcy. They want to. This is a golden opportunity for management to get rid of everyone's pension. Why take pay cuts when they are going to be forced down your throat in two months.

 

[Muddauber]

Why take pay cuts when they are going to be forced down your throat in two months.

Did you read Mark McClain's (chairman of the executive council of the Air Line Pilots Association at Northwest) statement? He clearly states why.

Muddy

 

[AA717driver]

Muddauber--I see both sides. In the '90's when TWA's MEC agreed to cuts, the company took them and left us alone.

Now, with the 1113 monster roaming freely, you never know if the agreement you signed will stand through a Ch.11 process.

I do agree that it is best to enter bankruptcy court with a signed agreement but these days it's no guarantee the company will not try to get more.TC

 

[Deli Guy]

C'mon Mark! (Mark Mclain) kick some mgm't a$$! Make me proud of going out on a limb here on Flt Info to support you.

 

[Jetjockey]

How far back (hire date) does the new 1,100 furloughs go back?

Truly sorry to hear this bad news.

 

[PCL_128]

How far back (hire date) does the new 1,100 furloughs go back?

Truly sorry to hear this bad news.

Well, there are no 1100 new furloughs yet. That is just the company's proposal. I doubt the NWA MEC would agree to any deal that would furlough that many pilots unless the deal includes a Mid Atlantic type deal where the furloughs would be flying 76-110 seaters for a subsidiary. That is probably a distinct possibility at this point. Time will tell.

 

[FlyBoeingJets]

They could fly for free and Northwest would still go into bankruptcy. They want to. This is a golden opportunity for management to get rid of everyone's pension. Why take pay cuts when they are going to be forced down your throat in two months.

If management can get most of the cuts they want (and I don't like them) without going into BK it may better to stay out of BK. BK is expensive and the cuts will then have to be deeper to account for that expense. If management figures additional cuts in BK will exceed the BK costs, they will go BK. Waiting this long to get the cuts is not a good sign.

The pilots must have decided management will either get big cuts or go BK. They are willing to deal.

 

[Diesel-9]

Pension freeze negotiations have been in progress for months. Final details are discussing disability and long term sick coverage. They are excellent benefits and need time to be worked out. Current proposal would net me about 70% (44% of my FAE) of my projected benefit. A negotiated D.C. is also in the works. With Katrina and continuing fuel price increases, NWA has gone from a year to a few months if not weeks to restructure costs from everyone, not just labor, to stay out of CH-11. There isn't a single person from management on down that wants CH-11 over any other scenario. It may become impossible to avoid as DAL looks to be in Ch-11 within days and more domino's fall and with the change in the law in Oct. it just may get to the point it would be better now than later. As we have seen, slashing labor isn't the answer. Competeing against Ch-11 for 3 years was real fair, as it is the REVENUE shortage killing the industry. Our annual fuel bill right now is $2.6 BILLION higher than in 2000 with the same revenues. The profession is about gone and the glorified bus service is in full swing, student license required.

 

[GVFlyer]

In my view, the current bankruptcy laws have created an unfair environment for the legacy airlines whose managements have shown the financial stewardship to avoid bankruptcy. Airlines such as Northwest have had to compete with airlines like United which has been operating with the reduced costs and protections offerred by Chapter 11 for three years. It is a bizzarre situation when the airlines with the most inept management, as evidenced by leading their airlines into bankruptcy, are allowed to set pricing for the industry.

Thankfully, this situation will be improved on October 13th.



GV

 

[Diesel-9]

Deregulations final consolidation will be triggered soon. Will be a painful shakeup but will have the legacy carriers that are left very powerful in the aftermath. The pressure will be on the LCC's to increase revenues in the post-CH-11 world and that will be harder for them to accomplish. In a few years there will be more LCC's out of business that you can add to the list of 50+ that have come and gone in the last 20+ years. Interesting times ahead.

 

[mnboyev]

So why dont the fare's get raised? Glorified bus service? Student pilots? Wow... What do those pinnacle fellas make in the right seat? Are you DC-9 Cappies Ok with the subsidiary making cut rate wage ?

I'm sure that Flint thing really caused the erosion of NWA. Spirit and AirTran are driving down fares ?? How many RJ's operate in your system? I dont think there is 180 tails total between Spirit and AirTran. ?? Just an observation.... I think the huge hub thing is a little pricey to operate fellas.?? ever think of that... A quick change in the economy, SARS, and fuel, is pretty tough to absorb over an extended time.

Be careful what you believe. Respectfully, Our LCC structure is less expensive. But, it certainly does not have the ability to generate the kind of dough that Red Rudder can. Its not the same product !! Why are they charging bus fare for limo service.. ?? Market share ? The pax are back... It seems marketing should charge accordingly for there product. Macys...Walmart.... both have clients... Shampoo at Macy's is a bit more than Taget and Walmart ! Is it better shampoo..?? How bout them Krispy Cremes.. Heck you can buy doughnuts at the 7 Eleven for pennies. Are they better doughnuts??
Maybe... Thats why they charge a bit more... People will pay more cause it is a better product or at least percieved to be better? Pretty simple concept... How bout a BMW vs Chevy... Which one cost more..... Both producers make money... just in different ways.

Sorry for the rant...But it is hard to understand the anger directed at the rival Competition LCC's. Dont let your management use the low fare model to influence labor give backs.

It is tough...no... it sucks .... I understand ... my buddies are on the street walking the line...Uncertain of there families future..


Dont let your managemnet sell you garbage. Givebacks may be necessary. But it not because of Student Pilots and Greyhound air travel. With great respect.... MNBOY

 

[canyonblue]

Sorry for the rant...But it is hard to understand the anger directed at the rival Competition LCC's. Dont let your management use the low fare model to influence labor give backs. MNBOY

Well said MNBOY. The problem is more with their "Limo" service, it is about as bad as a bus, and the product won't sell. I understand the need to want your market share, but if you have a product that you are selling for less than it takes to produce, than why keep selling it at that price? Just to piss off the competition? If the plan involves selling tickets for a loss, and you still can't produce results, then the plan is a loss. It is clear that this is not working at numerous airlines, so just raise your fares to cover the cost, or continue to give out of your own paycheck to support a failing business plan. I do believe that there are some pilots out there that believe their management has failed, but why do they keep giving them money? The LCC's did not put anyone in this predicament, the employees and management at said legacies did that themselves. If riding on Southwest is so bad, as some on this forum have claimed, then why is our product priced the same, or higher than a legacy airline. I think it has come to fruition that the only way anyone would fly on a legacy airline now is if you only charge them $99. Pretty sad state.

 

[densoo]

bizjournals.com
FAA confirms Northwest probe
Tuesday September 6, 11:35 pm ET

The Federal Aviation Administration confirms it is investigating maintenance of aircraft at Northwest Airlines while it is being struck by its union mechanics.

An FAA inspector, reassigned after raising alarms about the performance of strikebreaker mechanics, told his own bosses and Sen. Mark Dayton, D-Minn., that hundreds of unfiled inspection reports mentioned maintenance defects.

After the Wall Street Journal reported this, the FAA confirmed that it was probing Northwest performance and that the inspector's report had triggered it. Northwest itself maintained the planes are professionally maintained.

"NWA has employed experienced, licensed mechanics who are trained and prepared to safely and professionally maintain aircraft, according to Federal Aviation Administration regulations," Northwest said Tuesday on its Web site.

Elsewhere, the Standard & Poor's credit rating service has downgraded Northwest Airlines debt deeper into junk bondage, from CCC+ to CCC-. The lower the rating, the higher the interest rate cost of borrowing.

S&P analyst Philip Baggaley told clients Northwest was dealing with its mechanics strike but noted that the focus on managing that was keeping the airline from pursuing concessions from other employees.

But the Air Line Pilots Association said Tuesday it had quietly opened negotiations with Northwest.

For fall airline schedules, Northwest has 279 flights per month, or 76,136 seats, equal to 9.8 percent of total scheduled passenger capacity to Hawaii by all airlines. Published September 6, 2005 by Pacific Business News.

http://biz.yahoo.com/bizj/050906/1160501.html?.v=2

 

[hbrow15]

The problem with givebacks specifically to save pensions is what happens when you negotiate give backs and the company still goes into bankruptcy and the 1st think that goes is the pensions ?, with this management group its possible that it is part of the plan.I also agree that LCC's are not the problem because it is an entirely different product, they were supposed to serve that segment of the traveling public that just wanted to get from A to B cheaply without all of the so called extras on fullservice airlines. The problem is that we found out that most people really just wanted a cheap ticket and not a blanket, magazine and a bad meal. Couple that with the business traveler using the fax machine, e-mail, conference calls and microsoft net meeting along with FedEx overnight shipping to do business and make his kids T-ball game because he didn't have to get on an airplane and get raped at the ticket counter because it was a last minute trip and this is what we get. Also dont forget the true 1st class passengers are now fractional owners.