Delta’s Pilots Union Agrees to Temporary 15% Pay Cut

By Marilyn Adams

Delta Air Lines pilots Wednesday narrowly agreed to take a big pay cut for the second year in a row, averting the immediate threat of a devastating strike at the USA’s third-biggest airline.

The Air Line Pilots Association said Wednesday that members voted 58% to 42% to accept a temporary 15% pay cut, which follows a voluntary 30% cut pilots took last year.

Delta, in Chapter 11 reorganization after losing $11 billion in the last five years, had asserted it had the legal right to impose emergency wage cuts on the union. The union had threatened to strike if Delta unilaterally cut pilot pay. Before Christmas, negotiators for the company and the union reached a temporary agreement that had to be submitted to rank and file pilots for a vote.

Delta CEO Gerald Grinstein hailed the vote and expressed hope the two sides will proceed “in good faith.”

Wednesday’s vote result brought relief to Delta passengers, but bad blood between the airline and the union remains. The airline has insisted it needs a 20% pay cut from pilots, while the union accused the airline of overreaching.

The vote, which will cut the average pilot’s pay from $170,000 to about $146,000, was close, union spokesman Capt. John Culp said. “The pilots are ticked. They reluctantly agreed to this to buy us time. They are unconvinced further concessions will help.”

The two sides now have until March1 to agree on a plan to cut pilot pay longer-term. If they don’t reach a deal by then, they will go to binding arbitration.

Under pressure from low-fare carriers and high fuel prices, Delta has posted non-stop losses, including a $1.1billion loss in the third quarter alone. The company is more than $20billion in debt, and its employee pension plans are underfunded by more than $10billion.

Delta has ambitious plans to become profitable again in about two years and is moving quickly in its Chapter 11 case. It quit making pension plan contributions and will freeze pension plans for non-pilot employees as of Saturday. Pilot leaders fear their pension plan will be terminated soon by Delta or the federal government’s pension insurance agency because it’s so underfunded.

The pilots’ frustration is only one example of rancor among Delta workers and retirees as the bankruptcy moves into its fourth month. A committee of Delta retirees has petitioned the bankruptcy judge to stop Delta from dipping into a company trust fund for disabled and widowed workers and retirees.

The committee accuses the company of siphoning tens of millions of dollars from the trust fund to cover severance payments for departing workers instead of tapping the general fund. Delta says it has done nothing wrong. The dispute is headed to bankruptcy court in January.

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