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Delta Pilots on Board? Union Official Has High Hopes As Concession Vote Ends

Posted on: Saturday, 3 June 2006, 00:00 CDT

By Paul Beebe, The Salt Lake Tribune

May 31--As Delta Air Lines pilots continued to vote heavily ahead of today's deadline, an official with the pilots union predicted a concessions package crafted by negotiators will be approved by a majority of the bankrupt airline's 6,000 aviators.

"I think it will pass. We can't track the vote; we can only track the number of people who vote," said Capt. Ed Thiel, a Salt Lake City-based member of the union's executive council, which voted last month to recommend the temporary agreement to Delta's pilots.

Voting began May 17 and will close today. By midafternoon Tuesday, 86 percent of the pilots had cast ballots, and Thiel said the final tally is expected to exceed 90 percent.

"These are extraordinary times," Thiel said. "I think a lot of pilots waited to vote until the last minute because they are concerned by the motions of the Pension Benefit Guaranty Corporation and the retired pilots."

The government's pension insurer, or PBGC, and some retired pilots have asked a bankruptcy court to reject the concessions agreement reached last month, which Delta says would save it $280 million a year. A hearing on the dual objections is scheduled today in New York.

The insurer contends that it should get a $650 million note Delta has promised the pilots if the airline terminates their pension plan, as is expected. The federal corporation also wants a $2.1 billion unsecured claim the pilots have been promised.

In a separate motion, a retired pilots group has objected to the agreement out of fears the deal would reduce their benefits if the pension fund is terminated.

Thiel said the bankruptcy judge is not likely to rule in favor of the insurer or the retired pilots. He said the federal agency made similar objections during the bankruptcy cases of United Airlines and US Airways but did not prevail.

That view is supported by Delta and the Air Line Pilots Association. On Friday, Delta CEO Gerald Grinstein sent a letter to pilots assuring them the company will fight the objections. He singled out the insurer's objection in particular. A day earlier, the union distributed a similar message.

"We strongly disagree [with the PBGC]. We believe that their objection is without merit," Delta spokesman Anthony Black said Tuesday.

The agreement would keep a 14 percent pay cut that has been in place since December. It also promises a small raise that would begin in January. Pilots would get an interest-bearing note of $650 million with a 15-year term. And they would get a stake in Delta if it successfully emerges from bankruptcy.

If the court nixes the deal, Delta could be in deep trouble. An arbitration panel would resume consideration of the company's request to reject its pilots contract and unilaterally impose as much as $325 million in pay and benefits cuts. Pilots have said they would strike if that happened. Both sides agree a strike would destroy the company.

"Without this deal, Delta Air Lines is at grave risk and the PBGC -- and potentially, the U.S. taxpayer and all our employees -- will lose out in the long run if this company is put in jeopardy as a result of [PBGC's] objection," Grinstein said in his letter to pilots.

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Copyright (c) 2006, The Salt Lake Tribune

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DALRQ,

Source: The Salt Lake Tribune

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