Contributors to Delta fund cool their jets

Donors rethink giving money to buy fuel after bankruptcy

September 27, 2005|By Cox News Service

ATLANTA -- It started as a simple idea for fans of Delta: Donate money to buy fuel for the struggling hometown airline, because every expensive little drip counts. But a fuel fund set up late last month has taxied into complications.

For one thing, Delta filed for Chapter 11 bankruptcy court protection Sept. 14. Now organizers of the fuel fund say they won't turn over the several thousand dollars they've collected to Delta until they know it won't be taken by creditors.

And there's another issue. Some Delta workers and retirees may be wondering why they should give to an airline that plans to eliminate an additional 7,000 to 9,000 jobs, reduce health benefits and stop supplemental pension payments to higher-paid retirees, including pilots.

Ken Adams wrote a check for the fuel fund soon after it was created. But the retired Delta pilot said he won't be writing another one. Not after he learned that Delta plans to eliminate a big chunk of his monthly pension. "There is some disappointment there," said the 63-year-old Cartersville, Ga., resident. "It's hard to contribute to a fuel fund when you've just lost two-thirds of your pension."

Yet, like many who wrapped much of their lives around Delta, Adams' view is complex.

Mismanagement contributed to Delta's financial woes, he said. But he still has friends at the airline who made it a great place to work. "It's difficult to just be mad at the company," he said.

So, were it not for the likely financial squeeze on his pension, Adams said, he might contribute more to the fund in support of colleagues still flying.

Donations to the fuel fund totaled more than $13,000 as of about two weeks ago. That's enough to fuel up a single passenger jet for a one-way Atlanta-to-Seattle run.

"We know it's only a drip. That's not the issue," said Pat Malone, the national president of Delta Pioneers, the nonprofit group that set up the fund. "The issue is: What can we do to help Delta? If we can help this much, it's better than nothing at all."

This isn't the first time Delta employees have contributed cash to help their company. In the early 1980s, they bought the airline a Boeing 767 aircraft.

The idea for the fuel fund came from three flight attendants assisted by the Pioneers, whose 9,000-plus members mostly are retirees and longtime employees. The Pioneers created a fund for contributions at the Delta Employees Credit Union. It went into effect in late August, two weeks before Delta filed for Chapter 11.

The plan had been to present Delta with a certified check at the end of each month - starting Friday - to be used exclusively for jet fuel purchases. That plan is on hold. "We don't want to give them any money now to have a creditor come up and grab it," Malone said.

The money and new contributions will stay in the fund "until such time as Delta management can assure us that they will be in a position to buy fuel directly," she said. "I think that once the dust settles we probably will have an answer to this."

Malone, an 81-year-old Delta retiree, knows that some former and current workers are upset with the airline and might not give, though "nobody has told me directly and said, `Drop dead, lady.'"

As for Malone, while she has her own beefs related to past management, she plans to continue donating to the fund - just one more way she can support her former employer.

"I don't throw my kids out when they make mistakes," she said.

On a related front, Delta's retired pilots asked a federal judge yesterday to order the No. 3 U.S. carrier to make its October pension contribution to avoid risking a termination of a plan that serves thousands of former pilots and their families.

Since it filed for bankruptcy, Delta has sent letters to the 4,500 pensioners saying the payment won't be made. Delta Chief Executive Officer Gerald Grinstein said in the letters that the airline won't make coming contributions because of its "need to preserve as much cash as possible."

The Delta Pilots' Pension Preservation Organization said that by missing the payments, the airline is risking an involuntary termination of the plans by the Pension Benefit Guaranty Corp.

"The loss of pensions and retirement benefits can have a devastating impact on retirees and their families," Dean Booth, a lawyer representing the group, said in papers filed with the U.S. Bankruptcy Court in New York. "Delta has increased the risk of an involuntary termination by promising to skip the October minimum funding contribution."

The Atlanta-based airline needs court permission to keep making the payments and, citing financial pressures, hasn't yet made such a request. U.S. Bankruptcy Judge Prudence Carter Beatty said this month that she would address the issue at a hearing this month.

Bloomberg News contributed to this article.

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