Minneapolis – Flight attendants at Northwest Airlines Corp. asked a bankruptcy judge on Monday to reconsider pay cuts in light of the carrier’s improving fortunes.
U.S. Bankruptcy Judge Allan Gropper had allowed Northwest to cut flight attendants’ pay and change their work rules to save $195 million a year beginning July 31. He found that the carrier needed the concessions from attendants and others if it was to make money.
With those cuts in place, Northwest indeed made money during 2006, sort of. It reported a $301 million pretax profit if bankruptcy expenses are excluded. Including bankruptcy expenses, it lost $2.84 billion for the year.
In a bankruptcy-court motion Monday, flight attendants argued that Northwest’s business plan, drafted in late 2005, proved overly pessimistic.
The motion said Northwest was on track to achieve a 6.5 percent pretax profit margin in 2007, instead of 2010 as its earlier plan expected. Falling oil prices and higher ticket prices have helped Northwest and other airlines the past year.
Flight attendants also argued that worker concessions were based on the idea that creditors would lose money, too. But with bankruptcy claims trading for 86 cents on the dollar, creditor pain will be minimal, the attendants argued.
