U.S. District Court Ruling Blocks Job Actions By Northwest Airlines Flight Attendants
EAGAN, Minn. - (September 15, 2006) –The Honorable Victor Marrero of the United States District Court for the Southern District of New York today overturned a bankruptcy court decision and granted Northwest Airlines’ (OTC:NWACQ.PK) request for a preliminary injunction to prevent a threatened strike or work action by the company’s flight attendants, represented by the Association of Flight Attendants-CWA (AFA).
“Judge Marrero’s decision to grant Northwest the injunction allows our customers to continue to book Northwest Airlines with confidence, knowing that we will get them to their destinations reliably,” Doug Steenland, president and chief executive officer, said.
“While the court decision is reassuring to our customers, we remain committed to negotiating a consensual agreement with our flight attendants. We hope to accomplish that goal in the near future.”
Last month, the District Court issued an injunction against any work actions by the AFA after Northwest appealed Bankruptcy Court Judge Allan Gropper’s denial of the company’s request for a preliminary injunction, to provide the District Court time to consider Northwest’s appeal from Judge Gropper’s ruling. Upon review, Judge Marrero concluded that Judge Gropper had erred in denying Northwest’s request for an injunction.
FLIGHT ATTENDANT DISCUSSIONS
Northwest and the unions representing its flight attendants have negotiated two tentative agreements. In July, flight attendants rejected a tentative contract agreement that Northwest had negotiated with AFA and that would have met the targeted $195 million in annual labor cost savings. AFA endorsed that tentative agreement and recommended that its members vote in favor of it.
As a result of the contract rejection, and in accordance with a previous decision of the Bankruptcy Court, Northwest implemented contract terms and conditions for its flight attendants that met the required $195 million of annual labor cost savings for that group.
Northwest has reached agreements on permanent wage and benefit reduction agreements with the Air Line Pilots Association (ALPA), the International Association of Machinists and Aerospace Workers (IAM), Aircraft Technical Support Association (ATSA), the Transport Workers Union of America (TWU), and the Northwest Airlines Meteorologists Association (NAMA). Two rounds of salaried and management employee pay and benefit cuts have also been instituted and the needed aircraft maintenance employee labor cost savings have been achieved, which allowed Northwest to meet its goal of achieving $1.4 billion in annual labor savings.
Since beginning its restructuring process in September of last year, Northwest has remained focused on its plan to realize $2.5 billion in annual business improvements in order to return the company to profitability on a sustained basis. The restructuring plan continues to be centered on three goals: resizing and optimization of the airline's fleet to better serve Northwest's markets; realizing competitive labor and non-labor costs; and restructuring and recapitalization of the airline's balance sheet.
Northwest Airlines is the world's fifth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents.
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