Northwest expresses disappointment in AMFA decision

Airline Industry Information, August 5, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

Northwest Airlines (Nasdaq: NWAC) has issued a statement expressing disappointment over the decision by the Aircraft Mechanics Fraternal Association (AMFA) to leave the negotiations hosted by the National Mediation Board in Washington, DC.

Andy Roberts, the executive vice president of operations, said that the airline is "very disappointed that AMFA leaders decided to leave the bargaining table at this critical time". Roberts also said that Northwest believes it is in the best interest of the employees for the two parties to continue to meet, allowing them to reach a consensual agreement prior to 20 August. (On 20 August, the mechanics of the airline will be allowed to launch a strike if no agreement has been reached.)

Northwest has also said that it made a proposal to AMFA on 2 August, addressing claims from the union that no progress has been made. The proposal reportedly included job protection, offering specific job protection for more than 75% of technicians projected to be on the airline's payroll on 20 August. The offer also includes profit-sharing, offering AMFA employees a pro-rated share of 10% of all company annual pre-tax earnings in excess of USD1m and a pension offer, with Northwest proposing a freeze of the current defined benefit plan, allowing employees to collect all benefits accrued to date while earning future benefits in a replacement defined contribution plan.

The airline stated that whatever the outcome of negotiations with AMFA are, its customers can continue to book travel as the airline has developed a comprehensive contingency plan that includes expanded vendor relationships to ensure that Northwest continues to fly its full schedule. The plan has reportedly been developed over the past 18 months.

((Comments on this story may be sent to aii.feedback@m2.com))