July 25 (Bloomberg) -- Most U.S. airlines are emphasizing personal sacrifice, teamwork and cost-cutting in their fight for survival. At ailing Northwest Airlines Corp., self-interest and squabbling rule the day.

It starts at the top: Instead of hanging onto their shares of the airline's stock as a sign of faith in the company's future, Northwest's directors and top executives have been selling.

Last week, the Northwest Professional Flight Attendants Association union filed a lawsuit to stop the airline from training nonunion workers to take over their duties in case of a strike. The Egan Minnesota-based airline is worried unionized flight attendants might refuse to cross picket lines. Union workers don't want to be replaced.

Such a work stoppage seems more likely all the time. A day after the flight attendants filed their suit, a federal mediator declared an impasse in concession talks between Northwest and its mechanics, starting a 30-day countdown to a possible strike Aug. 20. In the event of a mechanics strike, Northwest said qualified company managers and outside contract laborers will take over maintenance.

Pilots Balk

The airline's unions are understandably reluctant to give up pay and benefits. Northwest says it must have $1.1 billion in annual labor savings and said earlier this month that it may seek bankruptcy protection if the initiative fails.

Northwest pilots took a 15 percent pay cut and granted other concessions last year, worth $265 million annually. The amount was short of what the airline said was needed. The pilots agreed to give more if the other unions give up pay as well.

Bankruptcy, which could come quickly in the event of a strike, almost certainly would lead to termination of employee pensions and even unilateral cuts in pay and other benefits. The result would almost surely be a smaller airline with fewer jobs.

As of March 31, Northwest had $2.3 billion in cash and marketable securities, down from $3.1 billion a year ago. The company reported a net loss of $862 million last year.

Northwest might well decide to file for bankruptcy protection by October, according to Ray Neidl, equity analyst for Calyon Securities USA Inc. In May he downgraded his rating on the carrier to ``neutral'' from ``buy.''

Deja Vu Again

Workers at Northwest can look to counterparts at United Airlines parent UAL Corp. for a preview of what might happen in Chapter 11 bankruptcy. After UAL's bankruptcy filing in December 2002, unions at the Elk Grove Township, Illinois-based carrier had to agree to pay cuts, since management had the right to end contracts unilaterally with court approval.

That unpleasant reality was clear to union workers at American Airlines and others who have been willing to grant concessions on pay and benefits in order to keep their companies alive.

The concessions by American workers already are having a salutary effect. Last Wednesday, Fort Worth, Texas-based AMR Corp., parent of American, reported net income of $58 million, only its third quarterly profit in the last 18 quarters. American has reduced annual costs by $4 billion since May 2003, when it was hours away from bankruptcy before unions agreed to $1.8 billion in wage and benefit reductions.

Likewise, Houston-based Continental Airlines Inc. posted second-quarter profit of $100 million last week, compared with a net loss of $28 million a year ago.

Insider Selling

The point is that major airlines that have been able to cut costs without the kind of union-management rancor that wrecked Eastern Airlines in the 1980s are slowly nursing themselves back to life. Passenger volume is increasing, as are ticket prices, though they still are below levels prevailing before the Sept. 11 terrorist attacks.

``We only need two or three big legacy air carriers in this country,'' Neidl said. There now are six -- American, United, Continental, Northwest, Delta Air Lines Inc. and US Airways Group Inc., which Friday won approval to merge with America West Holdings Corp. from the federal board that backed loans to the carriers after the Sept. 11, 2001 terrorist attacks. US Air filed for bankruptcy protection in September 2004.

In Neidl's view, Northwest probably won't survive independently, though it could be merged into some combination that includes Delta, provided the government grants an anti- trust exemption.

Northwest's leaders, perhaps mindful of the obstacles to the company's restructuring, have been selling their shares in the company. A review of insider transactions by 10 Northwest officers and directors over the past six months shows they were net sellers of company stock on 55 of 56 days.

Wilson's Sales

Last month, Gary Wilson, Northwest's chairman, disclosed in SEC filings that he had sold 2.47 million shares, or 59 percent of his stake. In his latest filing, dated July 14, Wilson reported selling another 50,000 shares, leaving him with a little more than 1 million shares.

The price of Northwest's share has fallen 46 percent in the past year and closed Friday at $4.60.

Northwest spokesman Bill Mellon said that Wilson's decision to sell was made to diversify his holdings. The company declined a request to interview Wilson.

Northwest unions, workers and investors might be forgiven for wondering whether their own leaders believe a bankruptcy filing is looming.

It's getting late for someone to step forward as a leader of Northwest, someone who can articulate a vision of the airline's future and perhaps inspire unions and management to pull together.

To contact the writer of this column: Doron Levin in Southfield, Michigan at dlevin5@bloomberg.net.

Last Updated: July 25, 2005 03:41 EDT