NWA Pilots Worried

[a320drivr]

NWA pilots concerned about possible bankruptcy

Judy Tarver
7/12/2005
​

In a memo to Northwest Airlines pilots, ALPA Master Executive Counsel (MEC) Chairman, referenced a Wilson Center poll that indicated most NWA pilots recognize bankruptcy is a possibility at the company. It also indicated the pilots believe the possibility of bankruptcy lies in some distant future.

In an 8-K report filed July 1, 2005, with the Securities and Exchange Commission, NWA management stated it had discussed with the NWA Board of Directors that failure to obtain necessary labor cost savings and pension relief could cause the company to consider seeking protection under Chapter 11 of the bankruptcy code.

The report claimed the spike in fuel prices has accelerated the need for labor cost savings.

The union analysis of NWA's financial condition confirmed that the time for NWA to achieve a solution outside of Chapter 11 is rapidly decreasing and based upon a statement by NWA President and CEO, Doug Steenland, Chapter 11 could come as soon as this fall.

 

[bafanguy]

Gee, that all sounds disturbingly familiar.

 

[ShadowFlight]

Chapter 11 could come as soon as this fall.

Do you think NWA will file prior to mid-October when the BK laws change and become more strict?

Peace

SF

 

[Jetjockey]

I wonder if/when NWA files chapter 11, if another carrier will come into MSP, and DTW and overlap thier profitable routes like NWA did to Midwest in MKE, and ATA in IND. I find it ironic that an airline busy trying to kill off weaker airlines has become weak itself. Just a casual observation.

 

[CapnVegetto]

Do you think NWA will file prior to mid-October when the BK laws change and become more strict?

Peace

SF

Is the pope catholic?

 

[Captain Overs]

Why be concerned if your airline files BK? With the laws the way they are you are only going to take pay cuts. I can't see any airline ceasing operation. It needs to happen to help the industry, but probably won't.

 

[FlyinScotsman]

Why be concerned if your airline files BK? With the laws the way they are you are only going to take pay cuts. I can't see any airline ceasing operation. It needs to happen to help the industry, but probably won't.

Dude, you are going to pi$$ off all of the mainline guys with that statement!

 

[skykid]

Why be concerned if your airline files BK? With the laws the way they are you are only going to take pay cuts. I can't see any airline ceasing operation. It needs to happen to help the industry, but probably won't.

After the BK laws change in October, an extremely complicated case like NW would be difficult or impossible to get done under the new rules.

 

[Captain Overs]

Dude, you are going to pi$$ off all of the mainline guys with that statement!

Do you think I give a sh!t? If you can't handle the reality of things then go bury your head in the sand.

 

[Pilottodd2]

You have to understand. NWA filing bankruptcy in no way insinuates that NWA is 'weak' or 'out of money'. It is simply another tool management uses to complete their agenda. In this case, to bust the unions before they start showing profits. (And believe me, the profits are just around the corner.)

 

[GogglesPisano]

I thought the new bankruptcy laws only affect individuals, not corporations.

 

[Dav8tor]

The new Bankruptcy Law affect both companies and individuals. It has a time period to how long a company can stay in bankruptcy and also give creditors a little bit more leverage.

 

[Paul R. Smith]

You have to understand. NWA filing bankruptcy in no way insinuates that NWA is 'weak' or 'out of money'. It is simply another tool management uses to complete their agenda. In this case, to bust the unions before they start showing profits. (And believe me, the profits are just around the corner.)

I know you are tryin to be funny but...seriously......

 

[320AV8R]

NWA has the same problem as DAL........payments that must be made to underfunded pension plans. Second up is fuel costs, third is Labor costs.

If pension legislation isn't passed this summer, NWA and DAL will be in CH 11 before you can say "Trick or Treat". Period.

The negotiations with the other unions could accelerate the senario for NWA; (DAL got $1.1B from the pilots, then pi$$ed it away....who knows what they're thinking....)

320AV8R

 

[Jetjockey]

You have to understand. NWA filing bankruptcy in no way insinuates that NWA is 'weak' or 'out of money'. It is simply another tool management uses to complete their agenda. In this case, to bust the unions before they start showing profits. (And believe me, the profits are just around the corner.)

Yah, that must be it.....let's pay hundreds of millions in legal fees so we can bust down the union. Have you been paying attention to what UAL has paid in legal fees since December of 2002? I guess AA had it all wrong staying out of Chapter 11.

 

[Tomct]

Well when they go into chptr 11, they get a better deal on their plane leases and probably even their headquarters as well. Maybe I'm way off here, but I would bet that UA has saved a TON of cash on just the lease payments alone. I agree that it is just a tool by mgmnt to get the employees pay down, but it is just getting CRAZY out here! Good Luck ALL!

 

[thruthemurk]

Yah, that must be it.....let's pay hundreds of millions in legal fees so we can bust down the union. Have you been paying attention to what UAL has paid in legal fees since December of 2002?

Apparently you haven't.

UAL has paid a sum total of less than 300 Million Dollars in legal fees in the 2 and 1/2 plus years they have been in bankruptcy. They have reduced the cost of their union contracts by over 2 Billion a year for at least 5 years. That is a very conservative 10 Billion Plus Dollars of union negotiated money removed. That does not include the money saved by bribing the government to destroy the pension plan.

Would you spend 300 million to save 10 Billion?

murk

Try a book called "Confessions of a Union Buster" by Levitt or "Grounded" by Bernstein if you want to get the real story on what some companies will spend to bust the union.

 

[MsFan]

I don't mean this as flame-bait, but in all honesty, why wouldn't NWA take their shot at Chpt 11? If they can't get what they need with pension reform in the Congress or labor concessions thru Section 6 negotiations with their unions, what do they have to lose with bankruptcy? Management at UAL and US Air (in my admittedly uneducated opinion) have gotten pretty much everything they've wanted from the bankrupty judges. Cut your labor costs by 40%? Sure thing. Do away with your pensions? No problem. Change work rules as much as you want to benefit management? Done.

The more I read about this industry, the less of a negative I see for these companies to take the Chpt 11 route. Granted you will incur huge costs in the short run with legal fees and the loss of passengers who don't want to book a ticket with a bankrupt carrier. But if you basically have your house in order, which it seems that NWA does, but all you need is to do is dump your pensions, slash labor costs and change work rules to benefit you, why wouldn't you take the Chpt 11 route? You lose control of your company to the creditors and judges, but those guys have just as much interest in keeping the company afloat as management does. Will a judge or board or creditors really say "No, NWA, you can't dump your pensions. That's unfair to your employees, and by the way so is cutting their pay by 40%. We won't let you do that." Not a chance. If you're NWA management, wouldn't you feel like you could emerge from Chpt 11 in 6-12 months a lean, mean fighting machine after all the good deals a judge will give you in the bankruptcy process?

I don't claim to be a bankruptcy lawyer or financial wizard, so maybe I have no idea what the he11 I'm talking about. But as a dude who's been furloughed for over three years who reads the financial news and checks the posts here regularly, I just can't see why a company who's posting multi-million dollar losses each quarter wouldn't do everything they can to find a way into Chapter 11. Especially before the laws change this fall. Honestly, someone who's smarter than me tell me that I have a completely overly simplistic view of things and I'm a jacka$$. I've been called a jacka$$ plenty of times in my life, but I'd never welcome it as much as now.

Best of luck to all of us in this f-upt industry that we've chosen as a profession.

K.C.

 

[pilotyip]

Makes it sound like profit is a naughty word

 

[Chuck Yogourt]

I wonder if/when NWA files chapter 11, if another carrier will come into MSP, and DTW and overlap thier profitable routes like NWA did to Midwest in MKE, and ATA in IND. I find it ironic that an airline busy trying to kill off weaker airlines has become weak itself. Just a casual observation.

Another carrier has come to MSP. It is Midwest. 5 times a day. Full every leg. Looking at expanding out of that market in the near future.

 

[Schwanker]

I don't mean this as flame-bait, but in all honesty, why wouldn't NWA take their shot at Chpt 11?

I think the only incentive they have to stay out of BK is the current stock/stock holders. Obviously, they'd lose huge in BK. It is managements job to reward the stockholders. I do agree-- if NWA does go the BK route, it will make them a stronger company on the other end. The question is, who does management work for? What is their goal? Provide the stockholders their greatest return on investment (minimize their loss) or be the strongest competitor at all costs (especially costs to the stockholders). In a BK restructuring, the current stock would likely be rendered worthless. By the way, even after dumping large positions recently in NWA--the BOD/Management still have a large stake in NWA stock.

Schwanker

 

[320AV8R]

I wonder if/when NWA files chapter 11, if another carrier will come into MSP, and DTW and overlap thier profitable routes like NWA did to Midwest in MKE, and ATA in IND. I find it ironic that an airline busy trying to kill off weaker airlines has become weak itself

JJ-

Have you heard of competition ?

NWA moved into IND and MKE, before someone else did, to protect the MSP and DTW hubs. Nobody b!tches when Southwest moves into PHL and PIT, they call it "insightful", even though it might kill off USAir.

As far as being "weak"......do you realize that UAL is transforming itself into the WORLD'S LARGEST LCC ? Their A320 pay rates are less than JB !! Pretty soon, all the Lecacy Carriers will come down to the UAL rates and benefits. The only difference, is that they will have WORLDWIDE routes, FIRST CLASS seating, ASSIGNED seats, FREQUENT FLYER miles, CLUB LOUNGES, etc.........

The Giant is waking up...............................

320AV8r

 

[1.3XVso]

Destroy

They need to fire every single old Flight attendants. That'll be the pilot one least to worry about. There just plain nasty. blah

 

[FlyinScotsman]

They need to fire every single old Flight attendants. That'll be the pilot one least to worry about. There just plain nasty. blah

I agree that will fix everything! We need to go old school with the F/A's,....the short skirts not married, young.....ya that is the route to go