NWA flight attendants finalizing concessionary deal

11/02/2005

Liz Fedor,
Star Tribune
Last update: November 2, 2005 at 5:37 PM

The Northwest Airlines flight attendants union said Wednesday that it expects to sign a temporary contract that would cut its members wages by 20 to 25 percent.

“This is going to have a devastating impact on our members,” Peter Fiske, a union official for the Professional Flight Attendants Association (PFAA), said Wednesday.

However, Fiske said that the interim agreement is preferable to allowing Northwest to abrogate the flight attendants contract in bankruptcy court.

Northwest management has asked the flight attendants union for permanent cuts worth about $195 million a year.

The interim agreement, which would be in effect for a few weeks or months, would slash Northwest’s flight attendant costs at the rate of $117 million per year, Fiske said.

“We have accepted an agreement in principle,” Fiske said in a Wednesday interview with the Star Tribune. Both sides are still working on the details of the contract language.

He said that the union’s five-member executive board, which includes Fiske, decided to accept an interim agreement because it will buy union leaders more time to negotiate a long-term contract.

There is a tremendous sense of urgency among union leaders at Northwest, because they are facing a Nov. 16 deadline. On that date, Northwest is scheduled to make a case in bankruptcy court for throwing out existing labor contracts.

But Northwest has said repeatedly that it prefers to reach consensual agreements with its unions, instead of having the bankruptcy court judge impose new contract terms on the unions.

On Tuesday afternoon, Northwest spokesman Bill Mellon said that management hopes to reach short-term concessionary agreements by Nov. 16 with the pilots, flight attendants and ground workers unions.

“We are in conversations with the three large unions about an interim agreement with each of the three,” Mellon said. The three big unions are the PFAA, Air Line Pilots Association (ALPA), and the International Association of Machinists and Aerospace Workers (IAM).

Flight attendants at Northwest earn about $20,000 to $45,000 per year. About 900 flight attendants were recently furloughed, and 8,933 are currently on the payroll.

On Tuesday night, PFAA’s executive board gave flight attendants a report that explained why they intend to accept an interim agreement. Union leaders said the temporary agreement would allow flight attendants to retain some control over their futures and prevent the “nightmare scenario” that could be forced upon them in bankruptcy court.

Fiske said it was important to brace union members for pay cuts that are expected to occur in December.

Northwest, which lost $475 million in the third quarter, will quickly save money by proceeding with a cost-cutting deal with the flight attendants, Fiske said. He emphasized that union leaders were pleased to see that Northwest management wanted to reach a deal in a cooperative fashion. “They wanted to do it consensually, rather than cause even more harm than they’ve already caused to our group,” Fiske said.

“We are also gaining the avoidance of having our future and our careers left to the whim of a bankruptcy judge,” Fiske said.

Overall, Northwest is attempting to reduce its labor costs by $1.4 billion per year.

The pilots union executive council is meeting in Bloomington today to discuss negotiating strategy. Pilot negotiators and Northwest management were in a bargaining session on Tuesday evening.

If a bankruptcy judge is left to impose new contract terms on the labor unions, “that certainly would not sit well with employees,” said Hal Myers, an ALPA spokesman.

But he said it is also in Northwest’s self-interest to reach deals at the bargaining table.

“The financial community would look much more favorably on the company if it had negotiated agreements with its labor unions than imposed agreements,” Myers said.

Mellon stressed that the airline wants “interim agreements” with its three big unions, because “it would allow both sides more time to reach agreement on final contracts.”

Northwest also has three small unions that represent dispatchers, meteorologists and technical support workers. “We are in intensified negotiations to reach final agreement with them as quickly as possible,” Mellon said.

Last December, Northwest reduced pay and benefits for management and salaried employees. The airline is now poised to implement $36 million in cutbacks for that group, Mellon said.

Next month, Northwest officers are expected to receive 10 percent pay cuts, while other salaried employees will see their pay reduced by 5 percent, he said. Those employees will also be subject to increases in medical co-payments as well as reductions in sick leave and paid holidays.