Pilot union leaders agree to interim pay cut of 23.9%

11/04/2005

Northwest pilot leaders have joined leaders of the flight attendants union in agreeing to temporary concessions.

Liz Fedor,
Star Tribune

Northwest Airlines pilot union leaders endorsed an interim contract Thursday night that would slash hourly pay rates by 23.9 percent.

Rank-and-file pilots will start voting on the tentative pact next week, and the double-digit pay cut would come on top of the 15 percent wage reduction that took effect late last year.

If approved, the interim agreement would save Northwest about $215 million on an annual basis.

Hal Myers, a spokesman for Northwest’s branch of the Air Line Pilots Association (ALPA), said the “goal of the interim agreement is to generate more time to negotiate a more satisfactory longer-term contract.”

On Wednesday, Northwest management said it wanted the pilots, flight attendants and ground workers unions to accept 60 percent of the permanent concessions it is seeking from each group by mid-November.

Management said that if the unions meet Northwest’s terms, it would defer plans to ask the bankruptcy judge Nov. 16 to cancel labor contracts.

Leaders of the Professional Flight Attendants Association (PFAA) said Wednesday that they will accept $117 million in temporary concessions.

PFAA leaders said they would have a stronger hand in bargaining with Northwest on a long-term contract.

On an 8-2 vote, the pilot union’s executive council voted late Thursday to recommend the interim concessions to its members. Myers said the bulk of the savings come from pay cuts.

In addition to reductions in hourly wages, he said, premiums for international flying would be eliminated.

Last year, pilots agreed to concessions that are saving the company $250 million on an annual basis. Northwest wants to reduce its overall labor costs by $1.4 billion and expects the pilots union to provide $612 million of those savings.

There are about 5,700 pilots at Northwest. Under the current contract, Northwest pilots earn $35,000 to $206,000, depending on their seniority and the planes they fly. About 500 pilots are on furloughs, so no one flying is on the low end of the pay scale.

Northwest’s largest union, the International Association of Machinists and Aerospace Workers (IAM), is in contract talks this week. Northwest is seeking $190 million in permanent cost savings from the IAM and would like the union’s leaders to endorse $114 million worth of temporary cutbacks.

“It is expected that Northwest Airlines will ask for a 19 percent reduction in pay and to pay employees only 70 percent for any sick time used,” the union said. “The IAM does not agree with this filing.”

IAM spokesman Joe Tiberi said, “We acknowledge that Northwest is in a financial crisis, but we need to do our due diligence to ensure that any cost savings we may agree to will be fair.”

Tiberi said Northwest has the ability to gain temporary cuts from the IAM through the bankruptcy court but added that the union negotiators are “focused on a long-term resolution.”

Northwest stressed that it wants to secure interim agreements from all three big unions, but one bankruptcy attorney said it might not be a problem if the IAM takes one path and the pilots and flight attendants take another approach.

If two of the three unions reach consensual agreements with Northwest on temporary cutbacks, Northwest could use the Nov. 16 court hearing to ask the judge to impose short-term cutbacks on the IAM, lawyer George Singer said.

If some of the unions agree to concessions at the bargaining table, that’s “extremely encouraging,” said Singer of Lindquist & Vennum in Minneapolis.

The carrier filed for bankruptcy protection Sept. 14.

Last year, the pay of salaried and management employees at Northwest was cut by up to 15 percent. Those workers are scheduled to receive a second pay cut next month. The airline’s officers will be subject to 10 percent pay cuts.