Northwest, Union Resume Talks

The airline and its flight attendants are in their second day of discussions.
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Mediated talks between

Northwest Airlines

(NWACQ)

and its flight attendants are resuming Thursday for a second day.

The talks, overseen by the National Mediation Board, restarted Wednesday after a U.S. District Court judge ruled Sept. 14 that flight attendants could not strike because the NMB had not released them from mediation.

The two sides had little to say about the first day of talks. The discussions represent the first in more than two months between Northwest and the union, which represents its 9,300 flight attendants.

"There is nothing to report from the meetings at this time," said Mollie Reiley, interim president of the Northwest chapter of the Association of Flight Attendants, in a prepared statement. Northwest spokesman Kurt Ebenhoch said Thursday that the company's "goal continues to be to reach a consensual agreement."

Besides talking, the union is appealing the decision by District Court Judge Victor Marrero of New York. "The litigation will continue while mediation under the supervision of the National Mediation Board continues on a separate track," the union said, in a report to members.

In the report, the union noted that Marrero's ruling marked the first time that a federal court has stopped a union from striking after a contract was canceled under Chapter 1113 of the bankruptcy law. Ironically, the union said, Chapter 1113 was "enacted in response to rampant employer abrogation of collective bargaining agreements in bankruptcy."

The ruling deprives Northwest of any motivation to negotiate, since the airline has already imposed a contract, the union said.

Despite the strike threat, airline analyst Ray Neidl of Calyon Securities said that the bankruptcies of Northwest and

Delta Air Lines

appear to be moving along on schedule.

The two carriers "have returned to profitability along with the industry, and both expect to be out of the reorganization process in the first or second quarter of 2007," Neidl wrote in a research report. He pointed out that both carriers have said their existing stock will be worthless following reorganization, when new stock is expected to be issued.