"Northwest: Labor concessions only way to save airline"

Wednesday, July 6, 2005

Northwest: Labor concessions only way to save airline 
By Joshua Freed
The Associated Press


MINNEAPOLIS - Northwest Airlines Corp. shares sank further on Tuesday, when
its chief executive said the airline must get labor concessions by the end
of 2005 or face the possibility of bankruptcy.

But Chief Executive Doug Steenland also said a pay cut offer by mechanics
was inadequate, and flight attendants have repeated their opposition to
cuts. Northwest shares sank 24 cents, or 5.4 percent, to close at $4.19 on
the Nasdaq Stock Market, a 52-week low.

"If we are unsuccessful in realizing labor cost restructuring, we are going
to have to consider the Chapter 11 bankruptcy option," Steenland said
Tuesday in a speech to Minneapolis business leaders.  

Steenland's comment was similar to a statement made by Northwest in a filing
with the Securities and Exchange Commission on Friday afternoon.

Northwest has been seeking $1.1 billion in labor cost savings from its
workers, and on Tuesday, Steenland repeated that Northwest wants those
savings by the end of 2005. 

In response to a follow-up question, Steenland declined to say whether that
meant Northwest would file for bankruptcy after the end of the year.

Northwest pilots have already taken a pay cut. The airline said it wants
$176 million from mechanics. Mechanics said they've offered $143.5 million,
but Northwest says it really amounts to only $87 million. And Steenland said
their offer would have their pay snap back to previous levels after two
years. Both sides have made strike preparations.

Flight attendants, meanwhile, are offering no concessions at all. 

"The flight attendants are not in a position where they're going to give
anything at this point," Jeff Gardner, Professional Flight Attendants
Association vice president, said after listening to Steenland's speech.


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