NWAC Northwest Airlines (MM)

Northwest Airlines Released From Mediation By National Mediation Board EAGAN, Minn., July 20 /PRNewswire-FirstCall/ -- Northwest Airlines (NASDAQ:NWAC) confirmed today that the National Mediation Board (NMB) has released the airline from mediated talks with The Aircraft Mechanics Fraternal Association (AMFA) union. Under terms of the federal Railway Labor Act, a thirty-day "cooling off" period has begun. It is planned that both parties will continue labor negotiations with the goal of reaching a new agreement in advance of a 12:01 a.m. EDT, August 20, 2005 deadline. "Northwest Airlines wants to continue to work with AMFA negotiators to reach a consensual agreement that provides wage and benefit levels that are fair to our employees while allowing Northwest to stem its record operating losses," said Andrew C. Roberts, executive vice president-operations. "Northwest Airlines believes that an end to NMB mediation was necessary so that a deadline could be established." "While Northwest wants to reach an expedited agreement with AMFA, whatever the outcome of negotiations during the next 30 days, Northwest customers can continue to depend on Northwest to meet their travel needs. In preparation for any possible job action, the airline has developed comprehensive contingency plans, including expanded vendor relationships and the augmentation of airline staff, to ensure that Northwest continues to operate reliably and is able to fly its full schedule," Roberts said. Earlier this year, Northwest announced that at least $1.1 billion in annual labor costs savings was necessary for the airline to restructure successfully. AMFA's share of this total is $176 million annually. AMFA's current proposal offers potential cost reductions of only $87 million on a temporary basis. The union's offer calls for only two years of reductions, with wage rates snapping back to 2005 levels in 2007, regardless of market conditions. As the result of labor agreements at its major competitors as well as lower labor costs structures at so-called "low cost carriers," Northwest Airlines now has the highest labor costs in the industry. "It is imperative that we reach a concessionary labor agreement with AMFA this year. Failure to achieve the needed $176 million in savings from AMFA will leave the airline at increased financial risk," Roberts added. Northwest remains in federal mediation with The International Association of Machinists and Aerospace Workers (IAM) and The Professional Flight Attendants Association (PFAA). In addition, it is continuing contract negotiations with representatives of its other unions. Statements in this news release that are not purely historical facts, including statements regarding our beliefs, expectations, intentions or strategies for the future, may be "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, the future level of air travel demand, the company's future load factors and yields, the airline pricing environment, increased costs for security, the cost and availability of aviation insurance coverage and war risk coverage, the general economic condition of the U.S. and other regions of the world, the price and availability of jet fuel, the aftermath of the war in Iraq, the possibility of additional terrorist attacks or the fear of such attacks, concerns about Severe Acute Respiratory Syndrome (SARS) and other influenza or contagious illnesses, labor negotiations both at other carriers and the company, low fare carrier expansion, capacity decisions of other carriers, actions of the U.S. and foreign governments, foreign currency exchange rate fluctuation and inflation. Additional information with respect to the factors and events that could cause differences between forward-looking statements and future actual results is contained in the company's Securities and Exchange Commission filings, including the company's Annual Report on Form 10-K for the year ended December 31, 2004. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release. Northwest Airlines is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,600 daily departures. Northwest and its travel partners serve more than 900 cities in more than 160 countries on six continents. DATASOURCE: Northwest Airlines CONTACT: Northwest Media Relations, +1-612-726-2331 Web site: http://www.nwa.com/

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