Delta pilots ratify contract

NEW YORK (Reuters) – Pilots at Delta Air Lines Inc. have
approved a new contract with the carrier, clearing one major
hurdle in the company’s restructuring plan, the airline and the
union said on Wednesday.

But the deal, which saves Delta about $280 million a year,
must now be approved by the U.S. Bankruptcy Court, where it is
being opposed by the federal pension insurer. A hearing is
scheduled for later on Wednesday.

The pilots, who are represented by the Air Line Pilots
Association, voted 61 percent in favor of the deal that will
save Atlanta-based Delta about $280 million a year. The union
said 95 percent of the pilots voted on the agreement that was
reached last month.

Delta, which filed for bankruptcy protection from creditors
in September and is restructuring its operations, is seeking $3
billion a year in revenue increases and cost cuts.

The airline said it was on track to achieve about 70
percent of the target by the end of the year and expects to
emerge from bankruptcy in the first half of 2007.

“The additional pilot savings are a significant, necessary
and appreciated component of Delta’s restructuring plan,” Chief
Executive Gerald Grinstein said.

“This agreement provides a framework for Delta to
successfully reorganize and emerge from bankruptcy ready to win
in today’s competitive marketplace,” union Chairman Lee Moak
said in a separate statement.

If the court approves the deal, the contract will become
effective on June 1, 2006, and is amendable on December 31,
2009, Delta said.

But the federal pension insurer, the Pension Benefit
Guaranty Corp., has objected to the pilots’ deal, saying the
contract could cost the government billions of dollars.

The airline said it had reached an agreement with another
opponent — DP3 Inc., the organization representing retired
Delta pilots.