NWA Holding Firm Against Striking Workers

Northwest Airlines continues to operate nearly a full schedule despite a worker's strike that began over the weekend. Thousands of mechanics, custodians and cleaners represented by the Aircraft Mechanics Fraternal Association walked out early Saturday morning but comprehensive contingency planning by airline management thus far appears to be working as planned.

It remains to be seen if the airline can maintain complete systemwide operations throughout the workweek, but initial analyst and local press reports suggested Northwest is holding its own after an Aug. 19 AMFA "job slowdown" by using "a combination of trained and licensed management staff, veteran technicians, contract and vendor mechanics," according to the airline. "We are meeting our maintenance needs safely and reliably." Travelers still are urged to check with Northwest regarding the status of their flight itineraries.

In a Web site posting last night, AMFA leadership said the airline's statements regarding normal operations "is Northwest deception intended to break our spirit and mislead the public. It's a matter of time before Northwest has to publicly admit that the contingency plan has big holes in it."

Nevertheless, "it appears that the preparations have paid off, with the airline operating close to a full schedule. No other unions so far have honored the strike," reported Calyon Securities analyst Ray Neidl in a morning update. "However, two union contracts remain open and more concessions will be necessary, including from the pilots, for the company to obtain its goal."

Had schedule disruptions spread across the carrier's system, it could have hastened consideration of a Chapter 11 filing. Instead, Northwest will continue its efforts to achieve $1.1 billion in annual labor cost savings.

"A strike coupled with smooth weekend operations is expected to elicit a warm embrace by the market come Monday, largely validating management's hard-line labor approach and the adequacy of its contingency planning," said J.P. Morgan Securities analyst Jamie Baker in a weekend report. In Monday morning trading, Northwest's stock was up more than $0.30 per share to about $5.70.