Why do I think this may get worse before it gets better? The nation’s number three and number four airlines, Delta and Northwest, both face critical deadlines tomorrow as battles with their respective labor unions heat up.
Both airlines filed for bankruptcy protection in September, and both are now facing the ugly proposition of negotiating—some might argue strong-arming—their workers into massive pay reductions in order to restructure operations on the way to profitability.
Delta, for example, is asking for another $325 million a year in concessions from its pilots, who have already given up $1 billion in previous negotiations. Northwest is looking to cut total labor costs by about $1.4 billion.
And now things could get ugly for the rest of us. If Wednesday passes without any deals, we could see labor strikes (with Northwest’s unions reportedly closer to striking than Delta’s). That, in turn, could cripple one or both of the carriers, and might force liquidation.
The likelihood of it all is still murky at best. Both airlines have said they will seek injunctions to stop their unions from striking. Union officials argue that without a contract in place, there is no legal recourse for management.
The end result, worst-case scenario, could be two defunct airlines and millions of stranded travelers. That’s not a reality yet, and it may never come to pass. But the fact that we’ve even reached the point where we’re discussing such a nuclear endgame tells the tale of how contentious these next few days, weeks, and months could become.