Northwest Gets Power To Void Flight Attendant Deal

They really need to revise bankruptcy laws, this is not what the bankruptcy laws are for.......


June 29, 2006
A US bankruptcy judge on Thursday granted Northwest Airlines the right to reject its flight attendants' contract and impose terms that would give the carrier USD$195 million in annual savings.

Judge Allan Gropper in New York's federal bankruptcy court said in his order that "the process of negotiation cannot drag on indefinitely," but he delayed the order for two weeks to give the airline and the flight attendants union more time to negotiate.

If Northwest and the Professional Flight Attendants Association fail to reach a deal in that time, Gropper said Northwest may impose the terms of a contract the workers rejected earlier this month.

"...there is no reason, in principle, why a new agreement with PFAA cannot be reached," Gropper said in his order.

The airline, which says it needs to cut its total labor costs by USD$1.4 billion a year, had asked the court for permission to void the contracts it has with unionized groups that have not yielded the requested concessions. Northwest has deals with its other workers.

Northwest and PFAA have been locked in talks over the contract for months, but have been unable to reach an agreement that satisfies a majority of the airlines's 9,300 flight attendants. The workers rejected a tentative deal earlier this month.

PFAA said union leaders have worked tirelessly to reach a deal and proposed a contract that would give Northwest its savings. That proposal, which called for concessions from airline management, was rejected, the union said.

"By their actions, NWA executives today exclaimed to the world that they have no intention of engendering the trust and goodwill of their employees," PFAA president Guy Meek said.

He said the union plans to honor Gropper's request and continue negotiations. Northwest had no immediate comment on the judge's order.

Also on Thursday, Northwest won from the court a six-month extension of its exclusive right to file a reorganization plan. The current exclusive period was set to expire in September. Northwest now has until March 16 to file a plan without competition from other parties.