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NWA birds still grounded
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August 31, 1998: 1:50 p.m. ET
Pilots' walkout said to cost $1 million a day as Labor Day Weekend looms
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NEW YORK (CNNfn) - In the wake of a weekend walkout by some 6,200 Northwest Airlines pilots, the crippled airline said Monday that it has canceled flights for the next few days, remaining effectively shut down until the strike ends.
Northwest, the fourth-largest U.S. carrier, has canceled domestic flights through Wednesday and international flights through Thursday, with an additional day of cancellations for each day the strike continues.
"It's going to get tight this week and there are going to be a lot of people who are just not going to be able to travel," an airline spokeswoman said, referring to the fact that other airlines were already flying nearly full planes ahead of the traditionally busy Labor Day travel weekend.
An estimated 150,000 passengers a day will be affected by the cancellations, which the airline said were required by the growing difficulties caused by the strike, begun Friday night. The job action is widely viewed as an attempt by Northwest's pilots to raise the bar on salary caps for all pilots industrywide.
And according to some industry observers, they might just do it.
Depending on how the contract talks are settled, SBC Warburg Dillon Read analysts John Pincavage said, the Northwest strike could be the catalyst for many more bargaining table sessions to come.
"If this deal is settled in line with what's already out there, that will put expectations of contracts yet to be settled more in line," he said. "On the other hand, if this thing blows the roof off (of existing pay scales), every labor leader in the country will fight for higher pay."
Pincavage, who added the airline industry has denied pilots adequate pay raises for years, said the Northwest strike has been a long time coming.
"The airlines are now making money and they've (shortchanged) their employees for years," he said. "Now they have to play (pay raise) catch-up, and they don't want to do that."
But Marta Laughlin, a Northwest spokeswoman, said the union has been unwilling to budge on the issue of pay raises, despite some 23 months of negotiations and an offer to increase salaries to the highest paying carriers.
Northwest barely escaped bankruptcy in 1993, when the carrier restructured to survive. And according to Laughlin, the company still is not in a position to pay pilots more than they earn at the three largest airlines: American, Delta and United.
"We are much leaner and more efficient, and while we've had several profitable quarters, we cannot afford to lead the pay raise in this industry," she said. "We can't afford to pay our pilots more than our competitors. In essence they are taking a strike for the pilots at all other carriers represented by the Air Line Pilots Association."
The airline industry as a whole, she added, operates on razor-thin profit margins. "We have profit growth of about 4 percent in a record year," she said. "They are looking for industry-leading pay."
Pincavage estimates the strike at Northwest will cost the carrier about $1 million a day.
No further talks have been scheduled since negotiations broke down Friday night.
There appears to be little hope for immediate negotiations between the Minneapolis-based airline and its pilots.
Without disclosing details, Minnesota Gov. Arne Carlson confirmed in a news conference that a "considerable gap" remains between the two sides.
Carlson said he would contact the White House Monday to discuss the situation and possible intervention. Citing figures from the state's Department of Trade and Economic Development, he said the strike's economic impact on Minnesota could reach nearly $232 million a month.
So far, President Clinton has declined to intervene, saying both sides should redouble their efforts to reach agreement as soon as possible.
But White House officials said Clinton will reconsider his position if the strike drags on until Labor Day. He also may order a 60-day "cooling off" period similar to the one imposed on American Airlines pilots last year.
Laughlin said Northwest has no control over government intervention. She said the White House will confer with state and regional officials to determine if the strike is causing economic harm.
Earlier this month, Air Canada's 2,100 pilots said they would set a strike deadline as soon as legally possible to fight for higher salaries
And in July, the Air Line Pilots Association agreed to a tentative settlement with ASA Holdings Inc., the parent of Atlantic Southeast Airlines. Terms of the deal weren't disclosed, but union negotiators said the contract represented a "large improvement" over one that was rejected in March.
The tentative agreement came on the heels of a new five-year labor contract negotiated by Continental Airlines pilots in June that increases their average pay by about 45 percent over three years by October 1, 1999.
Northwest stock (NWAC) was off 2-1/16, at 28-1/2, by midsession Monday on the Nasdaq. 
-- from staff and wire reports
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