Bankrupt Northwest Airlines Corp. Wednesday reached a tentative labor deal with its flight attendants union but continued negotiations with its pilots, who have threatened to strike if the airline voids their current contract.
A federal bankruptcy judge had given the No. 4 U.S. carrier until the close of business Wednesday to reach a deal. A Northwest spokesman said the judge had yet to call an end to talks and has also yet to make a ruling.
Northwest said the flight attendants agreement, which requires membership ratification, would save the airline $195 million annually. Neither the airline nor the Professional Flight Attendants Association disclosed additional details.
“Certainly, Northwest management must comprehend the difficult situation this concessionary agreement puts our members in,” said flight attendants union President Guy Meek. ”And as such we hope that they recognize that now they must treat all employees with great respect in order to heal the damage the bankruptcy process has inflicted upon our carrier.”
Northwest is negotiating with its pilots union on a deal that would save the carrier $358 million. The agreement with the flight attendants would remove a major hurdle for the airline as it seeks to cut $1.4 billion annually in labor costs and would defuse a strike threat from those workers.
Should Northwest be unable reach agreement with the Air Line Pilots Association, Judge Allan Gropper, of U.S. Bankruptcy Court in New York, could rule on a request by Northwest to void the workers’ contracts and impose new terms.
Northwest said it was moving closer to reaching a labor agreement with the Air Line Pilots Association. Gropper has already extended the talks twice as the parties reported progress. He could choose to delay the deadline again.
“There’s a fine balance between keeping the pressure on and pushing people over the edge,” airline consultant Robert Mann said. “The judge has to have a light finger on the trigger.”
ALPA said Tuesday its members had authorized its leaders to call a strike if Northwest voided their contract.
All major U.S. airlines have been battered by soaring fuel prices and by competition from low-fare rivals, which has made it difficult to keep fares high enough to cover costs.
Other carriers, including UAL Corp.’s United Airlines and ATA Holdings Corp.’s ATA Airlines, have gone through bankruptcy restructurings. The predecessor to the current US Airways Group Inc. descended into bankruptcy twice before being rescued by a merger with America West.
Northwest said on Tuesday its fourth-quarter loss tripled. The airline has a tentative deal with the union representing its ground workers. Last year, the carrier weathered a mechanics strike by using cheaper labor.
Delta Air Lines Inc., which filed for bankruptcy on the same day as Northwest, is asking for worker concessions as well. The No. 3 U.S. carrier has called on its pilots, the carrier’s only major unionized work group, to provide more than $300 million.
Like Northwest, Delta and ALPA faced a court-imposed deadline to reach a deal. But a Delta spokesman said a deal is unlikely.
Failure to reach an agreement would send Delta and its pilots union to an arbitration hearing.
