Delta pilots ratify pay-cut agreement

December 29, 2005|By COX NEWS SERVICE

ATLANTA -- Pilots bought cash-strapped Delta Air Lines some financial breathing room yesterday by ratifying a second round of double-digit wage cuts, but a deadline for a more comprehensive and potentially divisive labor deal still looms.

Rank-and-file pilots approved the union-backed measure 58 percent to 42 percent. It immediately slashes pilot pay 14 percent and saves Delta $143 million a year.

The latest concession is part of $3 billion in annual savings Delta is seeking to emerge from Chapter 11 bankruptcy court protection. It comes on top of a 32.5 percent pilot wage cut last year.

"Given the critical nature of our financial situation, this provides much needed financial relief," said Delta Chief Executive Officer Gerald Grinstein. "We greatly appreciate the additional sacrifices Delta employees - including our pilots - are making to help save the company."

A total of 5,166 pilots cast ballots in the ratification vote with 3,001 approving the pay cut and 2,165 rejecting it, the union said.

"This is the closest vote I can remember," said John Culp, a Delta pilot and spokesman for the Air Line Pilots Association.

Delta pilots, once the most highly paid in the airline industry, now trail pilots at cargo carriers FedEx and UPS, and mid-career Delta 737 captains are likely to earn less than pilots flying similar planes at rival AirTran, according to AIR Inc., a consulting service that tracks pay rates.

Average pay among Delta's 6,000 pilots now falls to $146,000 from $170,000.

Delta pilots clung to their industry-leading pay for three years after the Sept. 11, 2001, terrorist attacks plunged passenger airlines into an economic crisis. They agreed to cut their pay by $1 billion a year and gave up nearly a third of their pay last year in a fruitless effort to keep the No. 3 carrier out of bankruptcy court.

Surging fuel prices, increasing cut-rate competition and dwindling cash reserves convinced Delta to seek to reorganize under Chapter 11 in September.

However, the pay cuts that pilots ratified yesterday don't solve all the issues facing Delta pilots and managers.

The two sides will go back to the negotiating table almost immediately to hammer out a comprehensive deal covering wages, work rules, pensions and the size and number of jets Delta affiliates will fly. Delta wants Comair and ASA, which have lower pay scales, to fly larger aircraft. Delta pilots fear such a move would lead to furloughs and slow their career advancement.

If the two sides can't reach an agreement on those contentious issues by March 1, the pilots and managers would take their dispute to a three-member arbitration panel, which would decide whether to approve Delta's request to throw out the pilots' contract and impose different terms. Pilots have bluntly told managers they will refuse to work without a contract and threatened a strike that could kill the venerable carrier. Delta has said such a strike would be illegal.

ALPA Chairman Lee Moak reiterated the union's position in a letter to fellow pilots yesterday. "We will not work willingly without a contract," he said.

"We hold to the premise that, in the event our contract is rejected, we have a right to [strike]. We will lawfully and vigorously oppose any attempt to interfere with that right," Moak said.

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