Northwest Airlines

(NWAC)

pilots have voted in favor of a package of wage concessions that will save the Minnesota-based carrier $265 million a year.

The deal, which includes stock-option and profit-sharing components, was overwhelmingly approved by Northwest's members of the Air Line Pilots Association, the union said Friday.

The world's fifth-largest airline will cut another $35 million annually from the salaries and benefits of nonpilot salaried and management employees.

Pilots at

US Airways

(UAIRQ)

recently approved a package of even bigger wage concessions, as the carrier tries to emerge from Chapter 11 bankruptcy protection for the second time in as many years. Members of

Delta Air Lines'

(DAL) - Get Report

pilots union are in the process of voting on a massive deal of their own.

In a statement, Northwest said it was pleased its pilots have approved the two-year contract. "Northwest appreciates the financial sacrifice being made by its pilots as well as its salary and management employees, who will contribute another $35 million in annual savings," the statement said.

The airline added that it is in talks on new labor agreements with representatives of other unions, including the International Association of Machinists and Aerospace Workers, the Transport Workers of America, the Aircraft Mechanics Fraternal Association, and the Professional Flight Attendants Association.

"In light of current economic and competitive issues facing Northwest, the airline's overall labor cost reduction goal of $950 million in annual savings remains unchanged," the statement said. "The long-term outlook for Northwest Airlines remains strong, assuming we are able to achieve competitive labor cost agreements."

Nothwest and other network carriers are trying to cut costs in a tough, competitive environment. Overcapacity and a cutthroat fare war -- along with historically high fuel prices -- have taxed operations, leading to large losses in many cases.

Northwest recently said it had swung to a third-quarter loss but beat Wall Street's bottom-line estimate on stronger-than-expected revenue. The company posted a third-quarter net loss of $46 million, or 54 cents a share, much narrower than the 81-cent-a-share loss forecast by Wall Street. In the third quarter of 2003, Northwest logged a profit of $42 million, or 49 cents a share.

Company CEO Richard Anderson resigned on Nov. 1 to become an executive vice president at

UnitedHealth Group

(UNH) - Get Report

and was succeeded by Douglas Steenland, who's also the company's president.

Shares rose 15 cents, or 1.5%, to $10.08.