This could be a critical vote for Northwest Airlines. The pilots have said they are not happy with the idea of a lower paying regional carrier replacing some of their flights. The vote could go either way but most likely pilots will grudgingly approve the contract concessions set forth by NWA.
NWA recently announced that they will begin flying their new regional carrier, Compass, in early June from their hub in Minneapolis to Washington, D.C. The aim of Compass Air is to reduce costs and help replace NWA's anicent DC-9 fleet.
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Pilots at Northwest Airlines began voting Thursday on a new contract that would cut their pay and force them to work more hours.
If they approve the contract, it would put to rest lingering worries about a pilots strike that could put Detroit Metro Airport's dominant carrier out of business.
If pilots reject the contract, Northwest again could ask a bankruptcy judge to throw out the pilots' contract. Pilots have voted to strike if their contract is voided and Northwest imposes new terms.
Voting on the pilots' tentative deal concludes May 3.
The proposed contract would:
Give pilots a 5% match to their contributions into a new 401(k)-style retirement plan. The company's match would increase to 8% by 2011.
The proposed contract would save Northwest about $360 million a year. It would last for four calendar years after Northwest emerges from bankruptcy, which could happen this year or in 2007.
Northwest filed for bankruptcy protection Sept. 14, citing soaring jet fuel costs, high labor expenses and competition from low-cost carriers. It seeks to cut $1.4 billion annually from its labor expenses.
In one of the most heated issues of negotiations, Northwest would be able to let a subsidiary fly 90 jets with up to 76 seats. The company initially proposed allowing the subsidiary to fly jets with up to 100 seats, but has scaled that back.
The compromise over the subsidiary has little support from younger pilots who fly Northwest's fleet of DC9 planes. As Northwest replaces those planes, which have an average age of more than 34 years, the pilots' jobs could be lost to the new subsidiary or pilots might have to accept lower wages to fly aircrafts smaller than the DC9 in Northwest's main fleet.
But more senior pilots, who have banked pension benefits, have an incentive to see this contract approved. Northwest said in its annual report that the airline would be more likely to terminate its pilots' pension plan if the contract is not ratified.
As for the new subsidiary, Northwest applied to the U.S. Department of Transportation last week to transfer flying certificates from Independence Air, which went out of business this year, to its new commuter, named Compass Airlines. The airline wants its new carrier to start flying by June. Furloughed Northwest pilots and flight attendants will have first shot at jobs there.
The tentative deal maintains a 24% pay cut pilots agreed to take in November. That's on top of a 15% pay cut pilots voted to take in 2004.
Before the 24% cut, a 12th-year Boeing 747 captain, among the highest paid pilots at the airline, earned $220.88 an hour in flight, or about $198,900 a year, based on flying an average schedule of 75 hours a month. That wage now has dropped to $168 an hour in flight, or about $151,200 annually.
A 12th-year DC9 first officer made $110.51 an hour, or about $99,900 a year. That now has dropped to $84 an hour or $75,600 a year.
Pilots are paid those wages for the hours they fly, not the hours they're on duty, which can long exceed the time they're in the air due to delays and layovers.
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