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Wed, Aug 01, 2007

Analysts Say Don't Expect NWA Relief Until After Labor Day

Rehiring Of Furloughed Pilots Not A Quick Fix

As the saying goes... the first step towards recovery is admitting you have a problem. That's a lesson Northwest Airlines has had to take to heart, after two months of cancelled flights, surly passengers, and constant media attention.

However, recovery takes time... and despite the Eagan, MN-based airline's plan to hire hundreds of furloughed pilots and reduce capacity, in an attempt to stave off the rash of cancellations that have plagued Northwest since June... many in the industry expect the situation to get worse, or at best remain the same, before it gets any better.

It isn't hard to see why. Even furloughed pilots will need to be retrained before they can take the controls, a process that may take a month or more. And even then, it's possible Northwest won't be able to hire back all the pilots it needs.

Representatives with the Air Line Pilots Association -- quick to call Northwest management on the carpet for the airline's current state -- add it's unlikely anything more than a fraction of the 385 rehired pilots will actually return to the carrier. And that means, despite the airline's assertions to the contrary... August will likely be another tough month for Northwest passengers.

"It's highly unlikely this will actually work out for them," John Clifford, president of San Diego-based International Travel Management, told the Detroit News. "The pilot shortage will continue. It's not going to go away that easily."

As ANN reported, Northwest's current woes began in late June, less than one month after the carrier emerged from bankruptcy. As the airline's pilots reached their 90 flight-hours-per-month cap, there weren't enough pilots with time to spare to cover the airline's schedule. That pattern repeated in July.

Northwest initially blamed the situation on stormy weather, ATC issues, and pilot absenteeism... but pilots maintain the airline tried to do too much, with too few pilots, in hopes of padding the carrier's bottom line.

On Tuesday, the airline came closer than ever before to admitting that, yes, the pilots may be on to something.

"It is obviously a problem," said Andrea Fischer Newman, Northwest's senior vice president of government affairs. "We recognize it's a problem. We're taking responsibility for our part in the issue and doing what we can to correct it."

But the airline maintains a "significant increase" in pilots calling in sick, or just not showing up for their flights, is the primary reason for the cancellations.

In response, ALPA has said pilots who in the past volunteered to work extra time to help out, are less inclined to do so today, in the wake of lucrative bonuses paid to Northwest CEO Doug Steenland (right) and other managers. Pilots and other Northwest workers took steep pay and benefits cuts while the carrier was in bankruptcy.

That news may also mean trouble for Northwest as it tries to bring furloughed pilots back to work, said ALPA spokesman Wade Blaufuss. "Why would they want to return to an employer that clearly doesn't value them?" he asks. "They would be returning to a job that's expecting more work for far less pay."

Analyst Clifford agrees. "These pilots don't want to return to this company," he said. "They know they can find better pay elsewhere."

Newman says it doesn't matter how many furloughed pilots actually return to work, since the airline also plans to hire from outside the company -- a strategy that appears to be paying off, at least for now, for rival carrier United Airlines.

"It's irrelevant how many pilots are going to come back," she said. "Northwest is already receiving interest from pilots looking to join the company. We will begin hiring them once the furloughed pilots have made their decision regarding the opportunity."

In any case, analysts say don't expect relief at Northwest until well after Labor Day -- as more pilots come online, just as the busy summer travel season winds down.

"This is nothing more than a stop-gap measure," Clifford said of Northwest's plans. "They're definitely not coming out of bankruptcy any healthier."

FMI: www.nwa.com, www.alpa.org

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