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Delta Asking Too Much of Pilots, Union Rep Says

Posted on: Wednesday, 25 January 2006, 06:00 CST

By Marilyn Adams

Management and pilots at Delta Air Lines remain far apart on pay issues, and finding agreement could snag the carrier's quick exit from Chapter 11, the pilots union chief says.

Air Line Pilots Association Chairman Lee Moak said Delta is continuing to demand too much of pilots as it seeks to cut costs and exit bankruptcy protection, which it entered in September.

Moak commented in an interview before the union's governing board began meeting on Tuesday in Washington, D.C., to plan for negotiations expected to start next week.

Atlanta-based Delta, the USA's No.3 carrier, said last fall it needed $325million a year in contract concessions from the pilots union, or about a 20% pay cut. Moak argues Delta has been asking for too much, given pilots' earlier concessions valued at $1 billion annually. He also says the figure ignores what he characterizes as improving revenue for Delta.

Moak also disputed as overly optimistic CEO Gerald Grinstein's recent account of the airline's progress in bankruptcy. Grinstein told The Atlanta Journal-Constitution last week that he hopes Delta will exit bankruptcy by spring or summer 2007. He said Delta already has launched initiatives to achieve 70% of the $3billion a year it needs in cost cuts.

In bankruptcy court last fall, Delta petitioned the court for the right to reject the pilots' current contract and impose new terms. A bankruptcy judge gave both sides until March 1 to reach an out-of-court deal. If there's no agreement by then, the dispute will go to binding arbitration. In the interim, the union agreed to take a 14% pay cut.

Delta spokesman John Kennedy said Tuesday that the company's need for concessions hasn't changed. Moak also noted that Delta in bankruptcy has stopped making payments to all its employee pension plans. The pilots' plan is now only 54% funded, the union says, meaning the plan's assets would not cover expected future pension benefits.

Moak says the pilots' pension plan is at risk of being terminated and taken over by the government agency that insures pension benefits. A plan termination could cost every pilot hundreds of thousands of dollars in lifetime benefits that insurance wouldn't cover.

(c) Copyright 2005 USA TODAY, a division of Gannett Co. Inc.

Source: USA TODAY

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