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Judge Approves Interim Deal to Cut Delta Air Lines Pilots' Pay

Posted on: Wednesday, 14 December 2005, 12:00 CST

By Russell Grantham, The Atlanta Journal-Constitution

Dec. 14--A federal bankruptcy judge approved an interim deal that would cut Delta Air Lines pilots' pay 14 percent while their union and the company try to negotiate a broader contract agreement.

Under the accord approved by Judge Prudence Beatty on Tuesday in New York, a majority of pilots must ratify the interim pay cuts by Dec. 28 for the deal to remain in force. If approved, pay cuts and 1 percent in additional pilot cost savings will take effect retroactively on Thursday.

As part of the deal, the judge also suspended hearings on Delta's motion to void the pilots' labor contract and impose $325 million in annual cost savings, including a 19 percent pay cut.

"I was very pleased that at least a partial resolution had been reached and we would not be seeing a strike at Delta over Christmas," Beatty said Tuesday, referring to union leaders' threat to call a strike if terms were imposed.

The judge, who prodded the two sides toward a deal throughout nine days of hearings, congratulated them on reaching one last weekend.

"I was very much of the view that you could settle a lot better than I could," Beatty said.

Beatty also approved another part of the deal aimed at minimizing her role in the issue. Under the agreement, Delta and ALPA will turn to a three-person panel of arbitrators to decide whether the labor contract should be voided if they fail to reach a comprehensive deal by March 1. Both sides may also agree to ask the panel to aid with negotiations.

"It's a very important interim agreement which gives the parties time to try and reach a comprehensive agreement," Marshall Huebner, Delta's lawyer, said. "It does provide the company with substantial financial relief during this interim period we very much need."

Delta says the 14 percent cut will drop average pilot earnings from about $170,000 to about $146,000.

"We are pleased with the judge's decision and we look forward to working collaboratively with the union on this and other matters essential to the successful restructuring of Delta," airline spokesman Dan Lewis said.

Union leaders are endorsing the deal.

Delta filed for Chapter 11 protection in mid-September and sought new pilot pay reductions as part of a broad turnaround plan that also includes cuts for other workers, debt reduction through bankruptcy proceedings, and operational changes.

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Copyright (c) 2005, The Atlanta Journal-Constitution

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DALRQ,

Source: The Atlanta Journal and Constitution

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