Northwest Airlines pilots would rather take a pay cut than see changes in work rules that might lead to job losses, a union official said.
The Air Line Pilots Association outlined its negotiating approach in a four-page memo recently mailed to pilots. And union spokesman Curt Kruse, a Northwest pilot, elaborated on the strategy in an interview published Wednesday in the Star Tribune.
Last month, Northwest's pilots union leaders voted unanimously to propose $200 million in annual labor cost savings to help the Eagan-based airline regain profitability. Northwest management has said it needs to cut pilot costs by $442 million a year, and cut its total labor bill by $950 million.
Northwest, which operates a hub in Memphis, Tenn., declined to comment Wednesday.
Kruse said pilot negotiators would like to reach a tentative agreement with Northwest by September or October.
The cost reductions the pilots are proposing would run through 2006. Northwest wants a 6 1/2-year agreement.
"The $200 million was not a number we grabbed out of the air," Kruse said. "Our analysis shows that it would bring us down to a pilot unit cost which would be competitive with our main competitors, mainly United and American," he said.
It's unclear how much of the airline's total savings will come from pay rate cuts, because the union might accept some work rule changes that have no impact or limited effect on staffing levels. The pilots union also might be given credit for separate agreements that provide an economic benefit to the airline, such as one under discussion covering expansion of the cargo division.
The current contract includes a pay range of $35,000 to $240,000 a year. Northwest's compensation is the second-highest in the industry behind Delta Air Lines.
Among the major carriers, Kruse said Northwest had been the second-lowest for several years.
But that all changed when US Airways and United Airlines filed for bankruptcy protection in 2002, and American Airlines averted bankruptcy in 2003. The trio substantially reduced pay rates for airline employees, and some pilot groups agreed to scheduling changes that reduced vacation accruals and required more flying each month.
The pilot's union cautioned against agreeing to such changes at Northwest.
"While it may be relatively painless on an individual basis to give up a few days of vacation per year or work a few extra hours per month, the cumulative effect on staffing can be significant," ALPA said in its memo to Northwest pilots.
Work rule changes could delay recalls and increase furloughs. Currently, 881 pilots are on furloughs out of about 6,200 pilots.
For example, altering the vacation accrual rate could save Northwest $46 million a year and reduce the work force by 223 pilots, the union said.
Though Northwest pilots support two years of labor savings, the union proposal does not demand that wages "snap back" to pre-concession levels.
So far, the other unions have publicly opposed Northwest's call for concessions.
Northwest received the pilots' proposal April 28, and Kruse expects executives to formally respond to it before union leaders convene for a June 8 meeting.
In addition to reviewing the pilots' proposal, Kruse said, Northwest management is updating its business plan to include assumptions for higher fuel costs and pension law changes.
Information from: Star Tribune, http://www.startribune.com