The Update Message from the International Association of Machinists representing Continental, ExpressJet and Continental Micronesia Flight Attendants in the 2339 Local Lodges

Friday, September 23, 2005 

Northwest Airlines plans to lay off 1,400 flight attendants by January. The airline last week filed for bankruptcy protection, and is negotiating pay cuts with employee groups. Flight attendant furloughs will start in late October, the airline said.The union representing Northwest Airlines' flight attendants says the carrier hopes to outsource flight attendant jobs on all international flights and some jobs on some smaller planes. The airline is seeking pay cuts from flight attendants and other workers.  

Striking mechanics at Northwest Airlines will not participate in its bankruptcy reorganization process. Northwest said it will not try to amend the contract it imposed on the employees. "Because Northwest is operating under the implemented contract terms that provide the necessary labor cost savings from technicians, it is unnecessary to seek bankruptcy court relief for technician labor costs," a company spokesman said. A union spokesman insisted the workers will be a part of the bankruptcy process.

The bankruptcy of United Airlines will provide a model for Northwest Airlines and Delta Air Lines as they go through the bankruptcy process. United shed its pension program and expensive labor contracts while in bankruptcy. Northwest and Delta filed for bankruptcy protection last week after cutting thousands of jobs, cutting back on their flight schedules and reducing employees' pay.

A Wall Street Journal analysis suggests big U.S. airlines face a simple problem: They cannot generate enough revenue to cover their costs. The bankruptcy process exacerbates the problem because carriers are allowed to lower costs, making it difficult for rivals to raise prices. The federal government has also prevented the industry from restructuring by providing loan guarantees, preventing mergers and limiting foreign competition. Steep competition from low-fare airlines and strikes have also hurt large carriers.

Now that two more major airlines have filed for bankruptcy protection, Congress faces more pressure to reform the current pension system. Delta Air Lines and Northwest Airlines may turn their defined-benefit plans over to the Pension Benefit Guaranty Corp. To offset the higher PBGC liabilities, Congress may pass laws to increase premiums paid by member companies.

Delta Air Lines said it will cut 9,000 jobs as part of its restructuring plan. The airline, which filed for bankruptcy last week, will also lower employee pay and change its network. The airline wants to lower costs by $3 billion a year by the end of 2007, in addition to a previous cost-savings goal of $5 billion a year by the end of 2006.

We would like to encourage all members to attend your Local Lodge business meeting. Each base must have a quorum to conduct business. The following is a schedule for upcoming meetings:

Cleveland: Thursday, October 13, 4:00 pm at 669 North Rocky River Drive;

Guam: Wednesday, October 19, 4:00 p.m. at the Airport Conference Room;

Houston: Wednesday, September 28, 1:00 p.m. at 15710 JFK Blvd;