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Old 03-16-2005, 10:29 PM   #1  
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Default Northwest Parking 24 DC-9's

Posted on Thu, Mar. 17, 2005


Northwest to reduce jobs, fleet
Up to 930 mechanics may be cut; airline to ground 2 dozen planes

BY MARTIN J. MOYLAN

Pioneer Press

Northwest Airlines will ground two dozen jets and cut as many as 930 mechanics jobs in the Twin Cities by year's end as it tries to cope with record-high fuel prices and a domestic air-travel market in which too many seats are chasing too few passengers.

The Eagan-based airline said Wednesday that 130 mechanics jobs will be cut by May and that 700 to 800 additional jobs could be targeted over the remainder of the year as it parks the planes, mostly aging DC-9 jets.

Since the end of 2000, Northwest has eliminated some 3,700 maintenance jobs. Northwest's message, said local mechanics union President Ted Ludwig, is, "So, we won't need you guys."

Specifically, Northwest wouldn't need mechanics who earn $50,000 to $70,000 a year to perform the intense maintenance that many older DC-9s require.

As of the end of 2004, Northwest had 152 DC-9s in its fleet. The average age of the planes, which seat 78 to 125 passengers, was 34 years. During their most thorough maintenance checks, the planes essentially are rebuilt and restored to like-new condition.

The planes also are relative gas hogs. Northwest's newest Airbus jets, for instance, are up to 30 percent more fuel-efficient than the jets they're replacing.

With the grounding of the planes, Northwest's domestic flying will be essentially flat this year, compared with 2004. The airline had planned to slightly increase domestic flying this year.

Now, there will be fewer flights on some routes, with Northwest expecting to fly more 124-passenger Airbus A-319s.

The airline, which has lost about $2.5 billion on its operations in the past four years, has been slashing costs aggressively. On the labor front, it has been pushing its employee unions for nearly $1 billion in annual wage and other givebacks. That target could rise, Northwest has said.

Closing for sure, says Northwest, will be one heavy maintenance operation at the Minneapolis-St. Paul International Airport, which will force the 130 job cuts.

Union leader Ludwig suspects that Northwest's talk of 800 more job cuts could be a negotiating tactic, meant to soften up the mechanics at the bargaining table.

The mechanics and Northwest are in contract talks now, with the airline trying to extract 11 percent to 17 percent wage cuts and further reduce the mechanics' ranks.

Laid-off mechanics would have the right to claim jobs elsewhere in the country with Northwest, said Jeff Mathews, the union's contract coordinator.

But the union says that the airline assumes that most mechanics would not follow their jobs to other cities, not wanting to uproot their families or work hundreds of miles away from home.

"Northwest is banking on that," said Mathews.

In coming months, the confrontation between Northwest and its mechanics and their union could be the airline's most bruising.

No other work group at Northwest has seen more members lose jobs. Much of the work has gone to outside repair and maintenance firms, including some in China and Singapore. And Northwest wants to raise the negotiated cap on the amount of maintenance work it can send to those outside vendors in the U.S. and overseas.

Northwest, like other major carriers, has been tapping outside companies to handle more of its plane maintenance. It's the heavy maintenance in which planes are torn apart, inspected for cracks and wear, and then rebuilt that carriers are most keen to outsource.

Such operations can cost $3 million to $4 million per plane, with labor accounting for two-thirds or more of the cost.

With Northwest holding its flying flat this year, the flight attendants union doesn't expect any layoffs. But there could be a push for voluntary leaves, the Professional Flight Attendants Association says.

The Air Line Pilots Association at Northwest has indicated that the reduced flying means 60 furloughed pilots slated for recall will not return to work, leaving 500 on layoff.

Northwest employed about 38,000 people at the end of 2004, down from 53,000 four years ago. It employs about 16,000 workers in Minnesota.
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Old 03-16-2005, 11:03 PM   #2  
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Question

Wasn't NWA was featured in an article not too long ago touting that the DC-9 fleet was paid for many times over? Looks like expense/income curve is a bit flatter than they let-on. Funny how NWA hasn't gone along with an industry fare hike in years, until fuel and maint. expense causes them to start parking the only fleet they own outright.

Airline Managment would be a fun sport to watch if it wasn't hitting so close to home.
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Old 03-17-2005, 04:35 PM   #3  
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Default Fuel Cost and the "paid for" DC9

Last year, in a Wall Street Q&A, NWA CEO Richard Anderson, responded to a Question regarding the old DC9 Fleet. He responded that they were paid for and that the operating cost vs a mortgaged newer plan was lower but fuel prices affected that number. GUESS WHAT! Engine and Aircraft makers are offering SCREAMING deals. I think NWA is now making it look like its mechanics are the reason (not taking concessions easily---funny no pilot or flight attendendant layoffs with the 24 parked DC9's only 900+ mechanics) for the drop.

I think revenue/capacity/fuel prices are the reason...not mechanic costs. But hey, they NWA got the opportunity..so you know they will use it!
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