Date Set for Northwest Action

Northwest Airlines Corp. can void its contract with flight attendants and impose new terms July 17 if the parties are unable to reach an agreement on compensation before then, a Bankruptcy Court judge ruled Wednesday.

Judge Allan Gropper on June 29 approved the airline’s request to scrap its collective bargaining agreement with its flight attendants and gave both sides 14 days to negotiate a consensual deal before the changes take effect. Gropper said in a filing Wednesday in U.S. Bankruptcy Court in New York that the changes wouldn’t be instituted until July 17.

Eagan, Minn.-based Northwest, the fifth-largest U.S. carrier, is seeking $1.4 billion in labor cost reductions as part of its plan to emerge from bankruptcy protection. The flight attendants on June 6 rejected a tentative agreement with Northwest, which has secured concessions from its pilots, baggage handlers and other unions.

Northwest asked Gropper to void the contract with its flight attendants after the union’s rejection of a tentative accord that would have provided $195 million in savings. The airline later agreed to resume talks in an attempt to reach a second agreement.

Bankruptcy law allows a company to reject labor contracts, provided that it can show the agreements are a burden that would hinder its chances of reorganizing.