Northwest Airlines
announced in January that it was reevaluating its annual labor
cost-savings target of $950 million in light of record high fuel costs,
revenue negative domestic fare restructuring initiatives undertaken by
various airlines and labor cost reductions at its primary competitors
including United Airlines. After a careful review of these competitive issues, the airline has
decided to adjust its annual labor cost-savings goal from $950 million to
$1.1 billion.

In addition, the carrier will be asking its unions to agree to a freeze of
the current defined benefit pension programs. Northwest has proposed a new
defined contribution pension program to replace the current defined
benefit plan.

The new $1.1 billion target includes $300 million in annual labor savings
from Northwest pilots and salaried and management employees that went into
effect in December 2004.

Airline officials are meeting with union representatives to discuss the
new labor cost-savings and pension proposals with a goal of reaching
agreements with all contract groups as soon as possible.
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