NEW YORK (CNNMoney.com) -- Flight attendants at Northwest Airlines won the right from a bankruptcy court judge to go on strike on Aug. 25 at the nation's No. 5 airline.

Northwest (Charts) said it plans to appeal the decision and that it would work on contingency plans that will allow it to keep flying. But the struggling airline could be in trouble if it is grounded long term by a strike.

Northwest flights could be grounded by a flight attendants strike starting Aug. 25, according to a court ruling Thursday.

The airline weathered a strike by its mechanics in August 2005 and kept most of its flights in the air through the use of replacement workers and outside contractors. Those plans were disclosed by the airline in advance of that strike, though. A spokesman for the company would not discuss its plans to meet this latest strike threat.

CEO Doug Steenland said he still hopes to reach an agreement with the Association of Flight Attendants-CWA that will avoid a strike and added that the airline would work on contingency plans in case there is a strike.

"Our customers can continue to book Northwest with confidence," he said.

As to the chance of reaching a deal with an employee group that has rejected two tentative labor deals since June, Steenland said, "We believe we share a common interest with AFA and our flight attendants in restoring Northwest to economic good health. A strong, focused Northwest Airlines will provide stable employment, meaningful careers, growth opportunities and a secure retirement for our employees."

The airline says it needs $195 million in annual pay cuts from the flight attendants to move ahead with plans to reorganize under bankruptcy court protections.

The union charges the cuts being demanded by the company are too steep considering improved economics in the airline industry this summer.

While U.S. Bankruptcy Court Judge Allan Gropper denied the airline's request for an injunction to prevent a strike by 7,300 flight attendants now working at Northwest, he approved the company imposing cuts in pay and benefits and changes in hours that had been rejected by a vote of rank-and-file union members there.

The AFA hailed the decision and said it will move ahead with plans to start disrupting flights beginning 9:01 p.m. CDT Aug. 25.

The union, which represents 55,000 flight attendants across the industry, only won the right to represent Northwest flight attendants on July 6, when the rank and file voted out a previous independent union. There are 9,200 AFA members at Northwest, although not all are active.

The union reached a tentative agreement with Northwest on July 17 to give it the cost savings it sought. But that deal was rejected by a rank-and-file vote on July 31, the second time the flight attendants had voted down concessions since June.

Corey Caldwell, spokeswoman for the union, said the union is not unwilling to discuss some level of wage or benefit cuts but that "our issue right now is that the concessions they're asking for is entirely too steep."

She said the pay of the most senior flight attendant at Northwest was cut to $33,000 a year from $42,000 a year under terms of the contract just imposed by management and that the hours worked every month increased by one third.

The union said it will use a strategy known as "Create Havoc Around Our System," or "Chaos," in which it uses random, unannounced strikes on specific flights to disrupt airline operations. It did not rule out a systemwide shutdown as well.

Both the airline and union said there are currently no talks scheduled, although both said that is subject to change.

"That's up to the company. They have one more chance," said Caldwell. "They can choose to set greed aside and agree to a fair and equitable contract or face chaos."

The company reported a net loss of $285 million in the second quarter, although excluding special items related to reorganization, it had a profit of $179 million.

The airline industry as a whole lost $42 billion from 2001 to 2005, but many carriers returned to profitability thanks to a record percentage of seats being filled across the industry, combined with rising airfares.