Judge OKs Northwest Pacts With Unions

A New York bankruptcy judge on Wednesday approved interim agreements between Northwest Airlines Corp. and its pilot and flight attendant unions that included pay cuts of as much as 24%.

A hearing to permanently terminate collective bargaining agreements the airline made with its pilot, flight attendant and machinist unions before it filed for bankruptcy protection in September has been postponed until January.

Eagan, Minn.-based Northwest, the nation’s fourth-largest airline, expects a pretax loss of $1.7 billion for 2005 because of high fuel and wage costs, and said it was suffering losses of $4 million a day.

“The result will be significant cost savings,” Judge Allan Gropper said, adding that the pacts should “ameliorate” Northwest Airlines’ financial problems.

The airline’s attorneys said the agreement with the Air Line Pilots Assn. included a 23.9% pay cut, and the accord with flight attendants reduced pay by 20.7%. The unions ratified the agreements Monday.

The judge’s order Wednesday also effectively imposed pay cuts of 19% on a third union, the International Assn. of Machinists, which has not reached an interim agreement with the airline.

The machinist union represents 14,420 Northwest baggage handlers, ticket agents and other ground workers.

“The court allowed Northwest to impose significant pay reductions on our members, and it’s going to create a great deal of hardship,” said International Assn. of Machinists spokesman Joseph Tiberi, “but we welcome the additional time it provides us to secure a long-term agreement with the company that we can bring back to our members for a vote.”