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Northwest Airlines pilots approve contract

Associated Press

MINNEAPOLIS — Northwest Airlines pilots overwhelmingly approved a new contract Friday that gives them a 15-percent annual pay cut for the next two years and allows the company’s regional affiliates to carry more passengers.

The agreement would let Northwest Airlines Corp., the nation’s No. 4 carrier, increase revenue by adding new regional jets and increase the number of seats in existing small jets.

Of the 4,129 pilots who voted, 89 percent favored the agreement and 11 percent were opposed, the pilots’ union announced.

The concessions are part of an agreement between Eagan-based Northwest and the Air Line Pilots Association to generate $265 million in savings as the struggling company attempts to slash its labor costs by $950 million a year amid higher fuel costs and tougher competition.

Union leaders unanimously approved the contract earlier, and recommended that rank-and-file pilots follow suit in order to help Northwest renegotiate a $975 million credit agreement that expires in October 2005.

Failure to refinance the deal could have consequences for other credit agreements and for the company’s continued financial viability. The new contract won’t take effect until after the credit agreement is renegotiated.

“None of us are under the illusion that this agreement will permanently solve all of NWA’s financial problems; it will not,” Mark McClain, the chairman of the union’s Northwest Master Executive Council, wrote in a letter to pilots. “However, it can help reduce the immediate and significant threats to NWA pilots’ jobs and retirements.”

In a prepared statement, Northwest said it was pleased that pilots ratified the deal. “The long-term outlook for Northwest Airlines remains strong, assuming we are able to achieve competitive labor cost agreements,” the statement said.

Besides the 15-percent pay cut, pilots would have to pay a 20-percent premium share for medical and dental insurance, a first for Northwest pilots. They would also be subjected to a 1,200-hour-a-year cap on sick leave.