Apr. 14 -- Northwest Airlines flight attendants learned Friday that they failed in their attempt to persuade a bankruptcy judge to reduce the amount of concessions they must accept.
The Association of Flight Attendants (AFA) had argued that Northwest's financial condition has improved over the past year, so the union contended that the judge should reverse his previous order that allowed Northwest to toss out the attendants' contract.
However, U.S. Bankruptcy Judge Allan Gropper ruled Friday that there was "no basis in law" to support the union's position.
Last July, Gropper gave Northwest permission to reject the attendants' contract and impose pay rates, benefit changes and new work rules that are saving the carrier $195 million a year. Gropper's latest ruling means those cuts will remain in place.
In addition, the judge denied the union's legal argument that its members were entitled to a bankruptcy claim for more than $1 billion because of damages associated with their contract rejection.
"We are disappointed that the judge ruled the way he did," said David Borer, AFA's general counsel. "But it doesn't change the fact that the company still needs to find a way to reach an agreement with their flight attendants."
Two attendants' unions negotiated agreements last year that met Northwest's target of $195 million in annual labor savings, but both of them were voted down by the rank and file.
If the attendants had approved a deal, the members would have received a $182 million claim in the bankruptcy case. Pilots and ground workers, who have ratified labor contracts, already have sold portions of their claims.
Under Gropper's ruling, "the flight attendants won't have any claim" unless they reach a new deal by the end of the bankruptcy, Borer said.
Northwest expects to exit Chapter 11 by the end of June.
In a statement Friday, Northwest said: "Our central goal remains to reach a consensual agreement with our flight attendants. The company remains committed to offering the AFA and our flight attendants the opportunity to establish a claim through a ratified agreement."
Northwest has allowed its unions to sell 20 percent of their claims at a time, and Gropper has approved those requests.
In February, Northwest estimated that the $182 million claim that the carrier is willing to give the attendants would be worth about $18,000 per flight attendant. That's based on the assumption of getting 80 cents on the dollar for the claim and selling the entire claim.
As of Friday, no negotiations were scheduled between the parties. But the bankruptcy case appears to be in its final weeks, and the time to secure a claim is running short for the attendants.
Striking is not a current option for the attendants, because a federal district judge in New York and a federal appeals panel have blocked the attendants from walking off the job.
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The clock is ticking on Northwest flight attendants if they're to get a bankruptcy claim out of contract talks.
The union wants Northwest to trim concessions to $156 million because the airline is doing better than it projected.
If the U.S. Court of Appeals accepts the union's petition, the case would be reheard by a majority of the judges on the Second Circuit.
Gropper could rule as early as next week on two key issues that the Association of Flight Attendants has brought before him.