Northwest seeks court OK to reject contracts

0 Comments | USA TODAY, October, 2005 | by Dan Reed

Northwest Airlines asked a bankruptcy court Wednesday for permission to reject labor contracts if workers don't agree soon to $1.4 billion a year in concessions.

The carrier said its restructuring plans call for a $2.5 billion cut in operating costs, a roughly 15% reduction in the number of planes it flies, and creation of a lower-cost subsidiary to operate planes with 70 to 100 seats.

By the first quarter of 2006, Northwest expects its capacity to be down 11% to 13%, vs. the first quarter of this year. Longer term, the airline expects capacity to fall 15% or more from its pre-bankruptcy level.

Northwest CEO Doug Steenland said in a statement that reaching agreements with the carrier's unions remains Northwest's goal. But with oil prices around $65 a barrel,...