Bankruptcy Court Judge Gives Northwest Airlines and Two of its Unions More Time to Reach Agreements27 February 2006
Northwest Airlines (OTC: NWACQ) said today that The Honorable Allan L. Gropper, the U.S. Bankruptcy Court judge hearing the company's Section 1113(c) motion regarding its labor agreements with the Air Line Pilots Association (ALPA) and the Professional Flight Attendants Association (PFAA), has issued an order extending the 1113 period through the close of business on Wed., March 1, 2006.
The three parties agreed to an additional extension during a conference with the judge. Northwest and the two unions told the judge that they have continued to make progress on negotiating new contracts.
The company said that while it appreciates Judge Gropper giving the parties additional time to continue to reach consensual agreements, achieving the needed labor cost savings as soon as possible is critical to the success of Northwest Airlines, which is losing $3 million to $4 million dollars per day. The airline has reached agreements or has a contract out for member ratification with four of its other unions.
The trial on Northwest's Sections 1113(c) and 1114 motions began in bankruptcy court on Jan. 17 and was adjourned on Feb. 3. On Feb. 16, Judge Gropper gave the parties an extension so that negotiations could continue.
The parties have been negotiating new contracts since shortly after Northwest declared bankruptcy in mid-Sept. of last year.
As part of its ongoing restructuring efforts, Northwest Airlines is seeking $2.5 billion in overall savings in order to return the company to profitability on a sustained basis. To achieve these savings, Northwest is committed to realizing competitive labor and non-labor costs, restructuring its balance sheet, achieving market rates for its aircraft and optimizing business practices.
Northwest Airlines is the world's fifth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo, and Amsterdam, and approximately 1,200 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents.
Source: prnewswire
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