and its pilots reached a tentative agreement on contract terms Friday afternoon, a key step that brightens the outlook for the nation's fourth-largest airline as it battles to restructure with lower costs.
In a prepared statement, Northwest said it's pleased with the tentative deal, which includes labor and benefit cuts valued at $358 million.
The arrangement appears to represent a successful conclusion to U.S. Bankruptcy Court Judge Allan Gropper's efforts to keep everyone talking by extending a deadline after which the carrier could impose a contract on its pilots.
When the final deadline ended Wednesday, the airline didn't exercise its right to enforce a contract. Pilots said they would strike if that occurred. The Northwest chapter of the Air Line Pilots Association also said in a posting on its Web site that an agreement had been reached.
The agreement now requires two approvals, the first by union leaders who will meet tonight. If they sign off on the deal, the proposal would be submitted to the union's roughly 5,000 members for a vote.
Northwest filed for bankruptcy protection in September. The company said it would seek $2.5 billion in annual cost reductions, including $1.4 billion from labor. On Wednesday, the airline reached a tentative deal with its flight attendants for wage concessions of $195 million annually.
Meanwhile, the International Association of Machinists is presenting a contract settlement proposal to Northwest ground workers. In order to reach each of the three tentative agreements, the airline backed off some of its early proposals to outsource workers' jobs.
Ironically, while the IAM was able to get a tentative deal for its members, most of the airline's 4,400 veteran mechanics are now out on the street. An upstart union, the Aircraft Mechanics Fraternal Association, replaced the IAM as the mechanics' representative in 1999 after a union election, and led the mechanics out on strike in August. Now most of their $36-an-hour jobs are filled by replacement workers earning $26.53 hourly.
Northwest has an uneven history with its labor relations, including five pilot strikes since 1969.