Attorneys for Northwest Airlines are arguing in Bankruptcy Court that the company’s proposed business model, which calls for labor cost savings and cuts in retiree health benefits, is both necessary for the company’s reorganization and fair to its employees and retirees.“Since 2001, Northwest’s business has
suffered overwhelming losses,” the company said in a brief filed with the
United States Bankruptcy Court, Southern District of New York. “The time
has come for Northwest to put in place a business model that is sustainable and
realistic. There is really no alternative to achieving competitive labor costs.
And there is no more time to wait.”

Today is the first day of the hearing regarding Northwest’s motions, filed under Sections 1113(c) and 1114 of the Bankruptcy Code, asking the court to reject the company’s collective bargaining agreements with the Air Line Pilots Association (ALPA) and the Professional Flight Attendants Association (PFAA).Ê

Also today, the hearing begins on the company’s motion under Section 1114 to modify its retiree employee benefits.ÊNorthwest has been bargaining intensely with ALPA and PFAA and the committee representing the retirees in recent months and would still prefer to reach consensual agreements with ALPA and PFAA and with the Retiree Committee.
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