Flight attendants' deal -- the end of Northwest's labor woes?by Jeff Horwich, Minnesota Public Radio
A last-minute deal between Northwest Airlines and its flight attendants union means no strike for now -- and perhaps the end of the carrier's long drive to cut labor costs. Negotiators came to an agreement after talking through the weekend and straight through Sunday night.
St. Paul, Minn. — Union officials say the concessions are nothing to cheer. But they say negotiators did make "significant" gains after flight attendants overwhelmingly rejected a previous agreement last month.
The Association of Flight Attendants is saving any details of the tentative contract until union leaders have a chance to review it and put it out for a vote.
The baseline for the latest negotiations was the earlier, failed agreement -- which met Northwest's cost-savings target of $195 million, but would have cut take-home pay as much as 40 percent. Some 1,300 flight attendant jobs were projected to disappear.
Without a deal on Monday, Northwest would have had authority to impose that previously rejected contract.
AFA spokeswoman Sara Nelson declined to say how the latest contract improves on the last one, but she says union negotiators did make "a significant difference."
The AFA took over negotiations only last week, after leading a campaign to unseat the previous union. Nelson says it helped that flight attendants showed their resolve to stage an intermittent strike if necessary, a technique the union calls "CHAOS."
"Flight attendants came out very strong and showed Northwest Airlines that they meant business -- not only with the over 80 percent rejection of the previous agreement, but also with planning for a very vigorous CHAOS campaign should Northwest impose terms upon them. They gave Northwest something to think about," says Nelson.
While the flight attendants union felt it made gains, whatever they got did not reduce the total amount of the cuts. In a statement, Northwest says the new agreement still meets its goal of saving $195 million a year from flight attendants. The airline says it's pleased to have a deal.
If a majority of flight attendants vote to approve the contract, it will bring Northwest extremely close to its overall target of saving $1.4 billion a year in labor costs. Northwest says it expects flight attendants to finish voting by the end of the month.
The AFA's Sara Nelson says while the union's goal was always to get a deal, a deal is no occasion to celebrate.
"Northwest flight attendants will have to think long and hard about the sacrifices they're making for this airline," says Nelson. "But this is something that provides them with hope for the future, and gives them something to build upon in better times for Northwest Airlines."
One who believes the airline is headed for better times is airline industry consultant Jon Ash. Ash says Northwest has strong hubs and alliances with other airlines. He is among those who are bullish on the carrier's prospects once it emerges from bankruptcy.
"Without access to details of the agreement, it appears that they have achieved largely the objectives that they needed to achieve in order to be competitive in the marketplace," says Ash. "The key is that you have a competitive cost structure, and product quality that generates the kind of airfares and yields you need to make money."
Ash says quality of the flight experience is the next big challenge for Northwest, as it works to improve its reputation with travelers.
But Northwest can't turn away from labor matters just yet. Each of the cost savings deals Northwest has reached with its unions is contingent on every other union agreeing to cuts. In other words, none of the deals kicks in until they all do.
At this point, attention turns to one small labor group still without a tentative contract. Forty-two simulator technicians are still in talks, after rejecting an earlier deal in March.
The savings the airline wants from them are estimated at less than $1 million a year, but the entire $1.4 billion package is dependent upon a deal. The president of their union says with the airline no longer focused on the flight attendants, he hopes for an agreement by the end of the week.