Northwest pilots offer to cut costs by $200 million

MINNEAPOLIS -- Union leaders for Northwest Airlines pilots have voted to cut pilot labor costs by $200 million a year through 2006, or about half what the airline sought from the union.

Representatives of the Air Line Pilots Association International for Northwest voted unanimously Sunday to recommend the deal to its 6,300 NWA pilots.

Northwest Airlines had no comment on the proposal, said Kurt Ebenhoch, airline spokesman.

On Monday, union leaders were working toward deciding the final combination of concessions in work rules, salary and other factors that would equal the $200 million in pilot labor cost savings, said Will Holman, ALPA spokesman. However, he said layoffs were not an option.

The details of the proposal will be made public after they are presented to rank-and-file pilots, who would then be given a chance to respond. Holman said the process would begin next week and probably finish in April.

"We want to make sure we communicate that information to the pilot group first," he said.

The union leaders described the concessions as an investment in NWA, and said the pilots hoped to get assurances they would "share in the company's future success" in return, the union said in a statement.

Northwest management told ALPA leaders just over a year ago that the union needed to reduce pilot labor costs by $442 million a year through cuts in pay and benefits, changes in work rules and additional layoffs.

Northwest chief executive Richard Anderson has previously expressed support for a profit-sharing plan.

A union statement said that after an extensive analysis of the airline's finances, the union leaders decided that accepting the cuts now in return for a potential payoff later was better than traditional contract negotiations.

"We believe an investment by NWA pilots can have a meaningful effect to help ensure NWA's future success while also providing future benefits for NWA pilots," said Mark McClain, Northwest ALPA chairman. "Although we believe an investment is warranted, we do not believe pilot cost reductions of the magnitude being sought by Northwest management are necessary."

ALPA and NWA management began contract negotiations in July 2003.

Northwest pilot leaders are meeting management about halfway on cutbacks, Joel Denney, an airline analyst for Piper Jaffray & Co. in Minneapolis, told the Star Tribune of Minneapolis. The union action was "a great first step," he said.

Denney said, "The pilots tend to be the ones that take a leadership position in difficult decisions like this."

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