The threat of mutually assured destruction kept Northwest Airlines and its pilots at the bargaining table on Thursday.
Though Northwest had the power to impose a cost-cutting contract of its choosing, the pilots’ threat of a strike that could wreck the nation’s fourth-largest airline made that unlikely.
Northwest spokesman Kurt Ebenhoch has declined to address the issue directly, but said the company intended to keep talking.
“We continue to negotiate, and we are making progress on reaching a consensual agreement with our pilots,” he said.
The company wants $358 million in concessions from pilots, the union said last month. But the union and the company said last week that they had reached a framework for an agreement on who would fly small jets for Northwest, which had been at the heart of the pilot’s strike threat. Pilots are also pressing for protection if Eagan, Minn.-based Northwest is sold or split up, and for a share in the company once it emerges from bankruptcy.
Industry watchers and the pilots union both said it was unlikely Northwest would impose its terms. But Daniel Petree, dean of the business college at Embry-Riddle Aeronautical University, said it wasn’t out of the question.
“I don’t think it’s something they would do lightly,” he said, but added, “I doubt they’ve ruled it out.”
The airline has said a strike could put it out of business for good. Pilots would lose even more than most workers if that happened, because their large pensions are cut the most if the government has to bail out Northwest’s pension. And with the industry in layoff mode, getting a job at another carrier would be difficult.
“I’ve had pilots who’ve e-mailed me saying they’re so fed up they’re willing to fall on their swords,” said Vaughn Cordle, chief analyst at AirlineForecasts, who also flies part-time for a different airline. “Now think about that for a second — is that a silly thing to say, to take it to the point that they’re willing to shut down the airline out of principle?”
“They have a right to be upset, because what management is proposing is quite dramatic,” but changes to the industry have been dramatic, too, he said. Discount carriers have driven prices down and encroached on desirable routes, and fuel prices are up.
Based on 2005 numbers, Cordle estimated that Northwest pilots are 28 percent more expensive than the industry average. Since then, Northwest pilots have taken a temporary pay cut that would close much of that gap, but not all of it.
“They don’t want to go that deep,” he said of the union. “Hence the strike threat.”
The strike talk had passengers keeping an eye on negotiations.
Ron Protko and his wife Rhonda were leaving Thursday from Minneapolis on a 10-day jaunt to Hawaii that they’d planned well in advance. Protko said they’d been tracking the negotiations every day, but it hadn’t affected their travel plans.
“You can’t let it change things. You have no control over it,” Protko said.
Gary Anderson, another NWA flier in Minneapolis, was on his way to Steamboat Springs, Colo., to ski with friends. His only concession to the strike threat: renting ski equipment, instead of bringing his own, so he could be flexible about changing flight plans.
Anderson, a chief financial officer for a financial company, said he sympathized with the pilots.
“Those guys deserve to get paid a lot,” he said.
Meanwhile, pilot talks remained stalled at Delta Air Lines Inc., which is seeking more than $300 million in long-term pay and benefit cuts. The two sides missed a Wednesday deadline to settle, sending the carrier’s request to throw out its pilot contract to arbitration. Further negotiations before then were possible, but none were scheduled.
Two weeks of arbitration hearings are set to begin March 13 in Washington to decide whether to grant Delta’s request to throw out its contract with its pilots so the airline can impose the cuts it is seeking unilaterally. A decision would have to be issued by April 15.
The union that represents the Atlanta-based airline’s 6,000 pilots says it will strike if its contract is voided, and announced a strike authorization vote to run through April 4. The nation’s third-largest carrier has said a strike would put it out of business.