Northwest Airlines on Tuesday said it expects to complete negotiations with its pilots union to cut labor costs by this autumn, following similar concessions obtained by other major US carriers.

"We will participate and continue with this negotiation with the expectation of reaching a consensual agreement with them (the pilots) sometime this fall and then to use that agreement as a platform to then go off and approach our other labor groups," Northwest President Douglas Steenland told an investor conference.

Northwest has said it needs to cut USD$950 million in annual labor costs, much of it from its pilots, which get the second highest pay in the industry behind Delta's pilots, Steenland said.

The pilots union has offered cuts of USD$200 million.

Compensation at Northwest's other unions is more in line with the rest of the industry, Steenland said.

The airline employs some 39,000 people worldwide and reported a first quarter loss of USD$230 million in April, similar to other large US carriers that have lost billions amid an air travel slump exacerbated by the September 11, 2001, hijack attacks.

Steenland said the airline would contribute USD$250 million to its pension funds in the current fiscal year.

Steenland also said the airline would begin looking to upgrade its aging fleet of wide-body jets in the next few years but would retain its large fleet of DC-9 narrow-bodies, many of which are more than 30 years old.

"We love our DC-9s. That's proven to be a continuing successful decision and our DC-9s are going to remain in our fleet for basically as far as the eye can see," Steenland said.

(Reuters)