Deep Cuts Show How Much Trouble Lies Ahead

Now that pilots for Northwest Airlines have approved a new contract that cuts their pay and benefits, the question is: will that be enough to save the airline from bankruptcy. From all indications, it's going to be touch and go.

"Northwest appreciates the financial sacrifice being made by its pilots as well as its salaried and management employees, who will contribute another $35 million in annual savings," the airline said after the final vote was tallied on Friday.

In exchange for the salary cuts -- valued at about 15-percent -- as well as cuts in medical benefits, the pilots receive 3.5 million Northwest stock options and a new profit-sharing plan.

"We've done our part," said union chairman Mark McClain. "Before anybody calls upon the pilots again, the others are going to have to do their part."

Not everyone is happy with the deal. As part of the new agreement, the union gives Northwest the option of putting up to 40 regional jets into service -- without Northwest pilots. Nor would those aircraft have Northwest partner pilots in the cockpit, namely Mesaba and Pinnacle employees. Under that arrangement, if a company like ATA goes under and its gates become available, NWA would be able to send out the RJ's instead of much larger, more expensive aircraft.

"If you have a hub that goes unserved, you don't have time to buy airplanes, take delivery and get pilots trained," said McClain, quoted in the Minneapolis Star-Tribune (MN). "We either allow Northwest to do this or it doesn't get done."

"Mesaba pilots are not happy," said ALPA's Mesaba chairman, Tom Wychor. But he said he understands why Northwest pilots made the decision. "We will sit down and find a way to work together," Wychor said.

FMI: www.nwa.com