Bankrupt Northwest Airlines Corp. and its flight attendants reached a sort of truce on Monday, with a new round of talks planned and threat of as strike forestalled.
The negotiations to begin Wednesday will defuse, for now, a showdown that began June 6 when 80 percent of voting flight attendants rejected pay cuts and changes to work rules their union leaders had negotiated to save the airline $195 million annually.
That prompted Northwest to seek permission from its bankruptcy judge to nix its contract with flight attendants and impose its own terms — an action the union warned could provoke a strike.
But on Monday, the union said Northwest agreed not to impose its terms until at least June 30, and the union promised not to strike until at least then. The union said it agreed to give the company a 15-day notice before striking if it decides to back out of the agreement.
The Professional Flight Attendants Association also said the airline was at least temporarily withdrawing its motion for a court order to block a strike. The company has said a strike would be illegal.
By Monday the airline’s 9,300 flight attendants were the last holdouts among Northwest’s unions. The carrier’s Chapter 11 reorganization plan calls for total labor savings of $1.4 billion a year.
Northwest had warned last month that it “does not have the luxury of returning to the bargaining table.”
The two sides met in chambers with New York bankruptcy Judge Allan Gropper on Friday, and Northwest appeared to be seeking immediate permission to impose its terms, based on its court filing before the meeting. The discussion at the meeting with the judge hasn’t been disclosed, and Gropper hasn’t ruled.
PFAA President Guy Meek said Northwest didn’t say why it decided to negotiate after apparently ruling out talks before.
“My perception is that after that happened Friday, they didn’t get what they wanted. They had nowhere else to go,” he said.
However, Northwest characterized the Wednesday meeting as more of a chance to receive a new proposal from the PFAA. It still must meet the $195 million target, the company said in a letter from Northwest Vice President of Labor Relations Julie Hagen Showers to PFAA attorney Mark Richard.
Any deal between the airline and the union “must provide the necessary pension and retiree medical cost relief, and must be ratified in a very short time frame in order to stem the Company’s continuing losses,” the letter said.
Bankruptcy judges have the power to let companies impose whatever terms they want. But judges in airline bankruptcies have been loath to use it, said Anthony Sabino, a law professor at St. John’s University in New York who has been involved with several major airline bankruptcies.
“Because that final result is so Draconian, you see bankruptcy judges go to extraordinary lengths to avoid that point,” he said. That’s why he wasn’t surprised that the judge didn’t rule in Northwest’s case.
“I think what he told them was, ’None of you guys are going to get out of Dodge until you make a deal,”’ he said.
Also Monday, Northwest feeder carrier Mesaba Aviation Inc. renewed its own request to throw out the labor contracts of its pilots, flight attendants and mechanics. A bankruptcy court judge in Minneapolis had ruled against Mesaba’s earlier request, but he invited Mesaba to fix some technical errors and keep negotiating with its unions. In its court filing Monday, Mesaba said it has done those things but still failed to reach a deal.
Mesaba entered bankruptcy about a month after Northwest, which provides Mesaba’s planes, passengers and revenue.