Buy:al_bundy
08-22-05, 04:49 PM
Funny thing is that most of the replacement workers are union members themselves who were laid off from other airlines.
so much for solidarity
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a5GFm8b99V0Q&refer=home
Aug. 22 (Bloomberg) -- Northwest Airlines Corp. kept most of its planes flying since mechanics struck the carrier two days ago, boosting the company's bargaining power with unions and sending its shares and bonds higher.
The carrier completed 98 percent of its flights over the past weekend, Fulcrum Global Partners analyst Susan Donofrio in New York said in a report today, citing Northwest management. The shares rose 23 cents, or 4.3 percent, to $5.61 at 11:26 a.m. in Nasdaq Stock Market composite trading.
``Northwest is in the lead right now,'' Darryl Jenkins, an adjunct professor at Embry-Riddle Aeronautical University in Daytona Beach, Florida, said in an interview today. ``They will be able to fly through this without too many problems.''
The airline's plan to spend as much as $107 million to hire replacement workers and use outside contractors for some repair work paid off with no major disruptions over the weekend. The St. Paul, Minnesota-based company is also in talks with its flight attendants and bag handlers and says it still needs $800 million in concessions from employees to avoid bankruptcy.
Mechanics union members said Northwest's performance may suffer as the strike goes on. Steve MacFarlane, the union's assistant national director, said maintenance difficulties will mount over time, particularly because the airline operates so many older planes.
``We never believed we were going to shut the airline down,'' MacFarlane said. ``We knew this was going to take some time.''
Northwest spokeswoman Tracy Carlson declined to say how many flights were canceled or delayed this weekend.
Northwest, which has posted $2.5 billion in losses over the past four years, is trying to cut its total annual labor expense by $1.1 billion, including $176 million from the mechanics, to stem losses and avoid a bankruptcy filing. It has already won $300 million in cuts from pilots and managers.
Strike
A nationwide strike by the carrier's Aircraft Mechanics Fraternal Association, which represents 4,200 mechanics, aircraft cleaners and building custodians, started the walkout with pickets at 35 U.S. airports. The strike, which Northwest said could have forced it into bankruptcy, failed to draw sympathy strikes from other unions.
Negotiations between the company and union broke down last week after five months, mainly over the airline's proposal to fire all 600 of its cleaners and custodians and to pare mechanic jobs to 2,350 from 3,600.
No further negotiations are planned at this point. The National Mediation Board, which had been overseeing the talks, encouraged the two sides to return to bargaining.
The union's ranks have declined as workers retired to save their health-care benefits in the weeks before the strike. About 250 members retired this month, MacFarlane said.
Contingency Plan
Standard & Poor's said today it may lower ratings on Northwest's debt, citing the breakdown of negotiations and the strike. S&P rates Northwest's senior unsecured debt CCC-, its fourth-lowest level.
The airline's 8.875 percent notes maturing in 2006 rose about 5.5 cents on the dollar to 67.5 cents, according to Trace, the bond-price reporting system of NASD.
Northwest is trying to avoid following UAL Corp.'s United Airlines and US Airways Group Inc. into bankruptcy. Delta Air Lines Inc., the third-largest U.S. airline, has also warned it may seek bankruptcy protection as fuel prices soar.
Plan's Costs
The airline estimated in a report to its board that it might spend as much as $107 million on the contingency plan to keep flights operating amid the strike. The company estimated it can recover some costs over time to reduce the amount to $68 million. The plan included training 1,200 replacement mechanics and 1,500 flight attendants in the event that those workers decided to strike in sympathy.
Northwest has won fewer concessions from its workers than any other major airline.
``At the end of the day, Northwest has sent a message to the other labor groups,'' Roger King, an analyst at New York- based CreditSights, said in a report today.
The bigger test for Northwest will come today when flights increase and a greater number of business travelers -- who are more profitable customers than leisure travelers -- start traveling.
Northwest switched to a U.S. fall flight schedule two weeks earlier than usual as part of the contingency plan. Under that plan, there were 1,215 daily flights scheduled for Aug. 20, 18 percent fewer than a week earlier. The U.S. summer is the most profitable period for airlines, and earnings typically drop off the rest of the year.
Business Travel
If there are cancellations, the carrier will upset a key constituency, said Julius Maldutis, an independent analyst in New York who has covered the industry for 42 years. Delays won't bother business travelers as much because they've become accustomed to them, he said.
At the carrier's largest airport base in Detroit, a survey of flight arrivals at 11:30 a.m. yesterday showed seven of about 100 flights canceled and 10 delayed at least an hour. A survey of departures showed none canceled and 16 of about 100 delayed at least a half hour.
J.P. Morgan Securities Inc. analyst Jamie Baker in New York said 58 percent of flights in Detroit and Minneapolis on Aug. 20 left the gate within 15 minutes of their scheduled departure times through 5:15 p.m., and 98 percent of flights were completed.
Fewer Flights
Northwest, which funnels most of its flights through its airport bases in Detroit, Minneapolis and Memphis, Tennessee, planned 1,473 flights for today. Spokesman Kurt Ebenhoch declined to say how many operated the same day a week earlier. During the U.S. summer, Northwest operated an average of 1,600 daily flights, with more service on weekdays than weekends.
Some workers at Northwest engaged in a work slowdown the day before the strike, leading the company to take a ``high number'' of aircraft out of service, Ebenhoch said. The company apologized to customers and said replacement workers were helping reduce the repair backlog.
One traveler at the Detroit airport yesterday, Tim Adams, said he didn't like the way Northwest was treating its employees and he was ``nervous'' about the replacement workers. The General Motors Corp. engineer said his flight to Kansas City was on time.
``I stayed loyal to Northwest, but maybe I should think about using another airline,'' he said in an interview.
Jan Durbahn, a travel agent in Stewartville, Minnesota, said she had one customer seeking a flight to Manila who had no qualms about booking on Northwest yesterday.
The union picketed passenger entrances and airport trucking entrances in an effort to disrupt the delivery of supplies such as beverages and aircraft parts. About 150 union members marched at each airport in Detroit and Minneapolis on Aug. 20, and the union plans to have a 24-hour picket schedule seven days a week, leaders said.
so much for solidarity
http://quote.bloomberg.com/apps/news?pid=10000006&sid=a5GFm8b99V0Q&refer=home
Aug. 22 (Bloomberg) -- Northwest Airlines Corp. kept most of its planes flying since mechanics struck the carrier two days ago, boosting the company's bargaining power with unions and sending its shares and bonds higher.
The carrier completed 98 percent of its flights over the past weekend, Fulcrum Global Partners analyst Susan Donofrio in New York said in a report today, citing Northwest management. The shares rose 23 cents, or 4.3 percent, to $5.61 at 11:26 a.m. in Nasdaq Stock Market composite trading.
``Northwest is in the lead right now,'' Darryl Jenkins, an adjunct professor at Embry-Riddle Aeronautical University in Daytona Beach, Florida, said in an interview today. ``They will be able to fly through this without too many problems.''
The airline's plan to spend as much as $107 million to hire replacement workers and use outside contractors for some repair work paid off with no major disruptions over the weekend. The St. Paul, Minnesota-based company is also in talks with its flight attendants and bag handlers and says it still needs $800 million in concessions from employees to avoid bankruptcy.
Mechanics union members said Northwest's performance may suffer as the strike goes on. Steve MacFarlane, the union's assistant national director, said maintenance difficulties will mount over time, particularly because the airline operates so many older planes.
``We never believed we were going to shut the airline down,'' MacFarlane said. ``We knew this was going to take some time.''
Northwest spokeswoman Tracy Carlson declined to say how many flights were canceled or delayed this weekend.
Northwest, which has posted $2.5 billion in losses over the past four years, is trying to cut its total annual labor expense by $1.1 billion, including $176 million from the mechanics, to stem losses and avoid a bankruptcy filing. It has already won $300 million in cuts from pilots and managers.
Strike
A nationwide strike by the carrier's Aircraft Mechanics Fraternal Association, which represents 4,200 mechanics, aircraft cleaners and building custodians, started the walkout with pickets at 35 U.S. airports. The strike, which Northwest said could have forced it into bankruptcy, failed to draw sympathy strikes from other unions.
Negotiations between the company and union broke down last week after five months, mainly over the airline's proposal to fire all 600 of its cleaners and custodians and to pare mechanic jobs to 2,350 from 3,600.
No further negotiations are planned at this point. The National Mediation Board, which had been overseeing the talks, encouraged the two sides to return to bargaining.
The union's ranks have declined as workers retired to save their health-care benefits in the weeks before the strike. About 250 members retired this month, MacFarlane said.
Contingency Plan
Standard & Poor's said today it may lower ratings on Northwest's debt, citing the breakdown of negotiations and the strike. S&P rates Northwest's senior unsecured debt CCC-, its fourth-lowest level.
The airline's 8.875 percent notes maturing in 2006 rose about 5.5 cents on the dollar to 67.5 cents, according to Trace, the bond-price reporting system of NASD.
Northwest is trying to avoid following UAL Corp.'s United Airlines and US Airways Group Inc. into bankruptcy. Delta Air Lines Inc., the third-largest U.S. airline, has also warned it may seek bankruptcy protection as fuel prices soar.
Plan's Costs
The airline estimated in a report to its board that it might spend as much as $107 million on the contingency plan to keep flights operating amid the strike. The company estimated it can recover some costs over time to reduce the amount to $68 million. The plan included training 1,200 replacement mechanics and 1,500 flight attendants in the event that those workers decided to strike in sympathy.
Northwest has won fewer concessions from its workers than any other major airline.
``At the end of the day, Northwest has sent a message to the other labor groups,'' Roger King, an analyst at New York- based CreditSights, said in a report today.
The bigger test for Northwest will come today when flights increase and a greater number of business travelers -- who are more profitable customers than leisure travelers -- start traveling.
Northwest switched to a U.S. fall flight schedule two weeks earlier than usual as part of the contingency plan. Under that plan, there were 1,215 daily flights scheduled for Aug. 20, 18 percent fewer than a week earlier. The U.S. summer is the most profitable period for airlines, and earnings typically drop off the rest of the year.
Business Travel
If there are cancellations, the carrier will upset a key constituency, said Julius Maldutis, an independent analyst in New York who has covered the industry for 42 years. Delays won't bother business travelers as much because they've become accustomed to them, he said.
At the carrier's largest airport base in Detroit, a survey of flight arrivals at 11:30 a.m. yesterday showed seven of about 100 flights canceled and 10 delayed at least an hour. A survey of departures showed none canceled and 16 of about 100 delayed at least a half hour.
J.P. Morgan Securities Inc. analyst Jamie Baker in New York said 58 percent of flights in Detroit and Minneapolis on Aug. 20 left the gate within 15 minutes of their scheduled departure times through 5:15 p.m., and 98 percent of flights were completed.
Fewer Flights
Northwest, which funnels most of its flights through its airport bases in Detroit, Minneapolis and Memphis, Tennessee, planned 1,473 flights for today. Spokesman Kurt Ebenhoch declined to say how many operated the same day a week earlier. During the U.S. summer, Northwest operated an average of 1,600 daily flights, with more service on weekdays than weekends.
Some workers at Northwest engaged in a work slowdown the day before the strike, leading the company to take a ``high number'' of aircraft out of service, Ebenhoch said. The company apologized to customers and said replacement workers were helping reduce the repair backlog.
One traveler at the Detroit airport yesterday, Tim Adams, said he didn't like the way Northwest was treating its employees and he was ``nervous'' about the replacement workers. The General Motors Corp. engineer said his flight to Kansas City was on time.
``I stayed loyal to Northwest, but maybe I should think about using another airline,'' he said in an interview.
Jan Durbahn, a travel agent in Stewartville, Minnesota, said she had one customer seeking a flight to Manila who had no qualms about booking on Northwest yesterday.
The union picketed passenger entrances and airport trucking entrances in an effort to disrupt the delivery of supplies such as beverages and aircraft parts. About 150 union members marched at each airport in Detroit and Minneapolis on Aug. 20, and the union plans to have a 24-hour picket schedule seven days a week, leaders said.