Northwest Pilots Ratify Contract

The pact will cut the carrier's costs by $358 million.
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Pilots at

Northwest Airlines

(NWACQ)

have voted to ratify a five-and-a-half-year contract with the company that will cut the carrier's expenses by $358 million.

Northwest's chapter of the Air Line Pilots Association said the contract will preserve important job protections and is designed to help the company get out of bankruptcy.

The union said on its Web site that more than 63% of the pilots who voted supported the new contract, and that 95% of those eligible cast a ballot. Minnesota-based Northwest filed for Chapter 11 protection last September.

"The agreement is a painful but necessary part of a successful restructuring of Northwest Airlines," airline Master Executive Council Chairman Capt. Mark McClain said in a statement. "Now is the time for Northwest pilots to unite and begin looking forward to our company's successful emergence from bankruptcy."

According to the ALPA, the new agreement includes a 23.9% pay cut and shields pilots against the outsourcing of mainline flying to small jets. Northwest pilots will continue to fly aircraft with 77 or more seats. The number of small jets will be limited to 55 planes with 51 to 76 seats, or 90 aircraft if they're placed at an affiliate.

Northwest pilots also received an $888 million unsecured claim against the airline and will participate in a profit-sharing plan once the company exits bankruptcy.

"Our goal in negotiations was to provide contract changes which addressed Northwest's needs, but also provided security for Northwest pilot jobs," McClain's statement said. "Our negotiators did a remarkable job preventing Northwest management's excessive small-jet demands and retaining merger and fragmentation rights for Northwest pilots."

ALPA and Northwest's management began negotiations once the airline asked the bankruptcy court to throw out all of its union contracts. Ultimately, a tentative agreement was reached in March.