Labor Talks Make Progress At Northwest, Not Delta

Northwest Airlines yesterday reached a tentative contract agreement with flight attendants that would cut $195 million in labor costs, but the bankrupt carrier still is in the midst of discussions with pilots, as it seeks to slash overall labor expenses by $1.4 billion annually. Also under Chapter 11 protection, Delta Air Lines continued discussions with labor groups despite a failure to reach an agreement with its pilots union by Wednesday's deadline.

Noting its pleasure in reaching the agreement with flight attendants, Northwest on Wednesday said the contract still is subject to ratification by employees representing the Professional Flight Attendants Association.

Delta's pilots union, meanwhile, in a statement said the next step in the process moves discussions "to a three-member neutral panel for a possible decision" in 45 days. In the meantime, the union said it would continue to work toward an agreement.

"Delta senior executives continue to demand more than $300 million in annual concessions, including an additional 18 percent pay cut from the pilots, while refusing to fund the Delta employee pension plans and placing the Delta pilots' pension plan at grave risk," the pilots union said in a statement. "Delta's demands are on the heels of a $1 billion annual concession package the Delta pilots previously agreed to, including a 32.5 percent pay cut."

Earlier this week, Northwest pilots said they would stage pickets at airports in Detroit, Minneapolis, Memphis and Seattle to "demonstrate their frustration with Northwest management's abuse of the bankruptcy process to demand excessive and unreasonable concessions," the Air Line Pilots Association said.

"The company continues to negotiate with ALPA," a Northwest spokesperson said today. "We're making progress and continue to make progress on reaching a consensual agreement."

Economist and aviation consultant Julius Maldutis, president of Aviation Dynamics, at last week's Masters Program in Washington, D.C., described bankruptcy proceedings and Delta and Northwest as "excruciatingly painful with a growing risk of Chapter 7 liquidation." Maldutis said Delta's second round of wage cuts "is raising the risk of a strike."

Meanwhile, Maldutis derided bankruptcy judges in the proceedings, noting several postponements in decisions. "Isn't it nice how bankruptcy judges don't want to make the tough decisions?" he said. "One of these airlines could end up being a footnote in history books by the time we meet again next year or they will succeed and come out of Chapter 11 like the others."