November 5, 2004
ALPA's Northwest Airlines Pilots Ratify Two-Year Contract
BLOOMINGTON, MINN.---Northwest Airlines pilots, as represented by the Air Line Pilots Association, International (ALPA), voted today to ratify a new two-year contract. The "Bridge/Investment Agreement" was approved by an 89.1 percent to 10.9 percent margin, and is designed to help NWA meet its near-term economic challenges and bridge to a time when industry conditions have either improved or all NWA employee groups will participate in cost savings measures.
The new agreement, which runs through Dec. 31, 2006, generates $300 million in annual cost savings and additional revenue for NWA. Northwest pilots contribute $265 million annually through a 15 percent reduction in pay plus other cost reductions and provisions which allow NWA to generate additional revenue. NWA management and non-contract employees contribute an additional $35 million in annual savings through reductions in pay and benefits. NWA pilots will receive 3.5 million options for NWA stock plus additional profit sharing as part of the agreement.
"I believe we achieved a better result for our pilots and our airline by being proactive than by waiting for a financial crisis to force us into an agreement. This is a positive step down a different path than most airlines have taken in response to current industry conditions," said Capt. Mark McClain, NWA Master Executive Council (MEC) chairman. McClain added, "Labor costs aren't the cause of NWA's problems, but by allowing our company to compete more effectively in this difficult environment we are helping to secure our pilots' careers and the future of our airline."
The agreement is conditioned on the satisfactory restructuring of NWA's current revolving debt facility. Implementation of the agreement will occur only after the restructuring agreement is completed. ALPA views restructuring of this debt on acceptable terms, expected to be completed in coming weeks, as necessary for the success of NWA's business plan.
The NWA unit of ALPA represents over 6,000 NWA pilots. Founded in 1931, ALPA is the world's oldest and largest pilot union representing more than 64,000 pilots at 43 airlines in the United States and Canada. Visit the ALPA website at http://www.alpa.org.
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SOURCE: Air Line Pilots Association (ALPA)
ALPA CONTACT: Will Holman, (612) 840-7749