Northwest Air, Pilots in Deal

The tentative agreement calls for labor savings of about $265 million a year.
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Northwest Airlines

(NWAC)

Thursday said it has reached a tentative agreement with its pilots for $265 million in annual wage, benefit and other contract concessions.

Under the agreement, which must be approved by the master executive council of the Air Line Pilots Association International (ALPA) and ratified by the union's rank and file, the world's fifth-largest airline said it would cut another $35 million annually from the salaries and benefits of nonpilot salaried and management employees.

The agreement also calls for the restructuring of Northwest's $975 million revolving credit facility, prior to contract implementation, the airline said in a news release.

Northwest shares rose 58 cents, or 7.7%, to $8.16.

If all terms of the tentative agreement are met, pilot and salaried employee labor cost reductions could take effect as early as Dec. 1, the company said.