Here comes another industry leading contract...
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September 12, 2005
Delta Asks Pilots for More Wage and Benefit Cuts
By MICHELINE MAYNARD
Delta Air Lines, which is said to be on the brink of filing for bankruptcy protection, asked its pilots for a second round of wage and benefit cuts late today, according to the Air Line Pilots Association.
The move came as Northwest Airlines, which is seeking more cuts from employees in order to fend off its own bankruptcy filing, considered giving permanent jobs to some substitute mechanics starting Tuesday.
Delta's request for cuts was disclosed in a message from the pilots' union to its 6,500 members. It said negotiators for the airline and the union met today at Delta's request. "The company presented the negotiators with a comprehensive, deeply concessionary contract proposal," the message said.
The message did not disclose the size of the cuts sought by Delta, which obtained $1 billion in wage and benefit concessions a year ago, including about a one-third cut in pay. Delta also did not give details. But in a statement, the airline said it had made proposals that were "necessary to address the severe financial problems that the company and its people are facing."
People with knowledge of the proposal said it would cut pilots' wages and benefits to roughly the levels of their counterparts at low-fare airlines. But pilots at those airlines, like Southwest and JetBlue, receive bonuses and other compensation because their companies are profitable. Delta, by contrast, has lost nearly $10 billion this decade.
The pilots' message said leaders would meet today to discuss whether to hold formal negotiations. But that may come after a bankruptcy filing, which could occur late this week, according to people with direct knowledge of Delta's plans. Delta shares fell 25 cents today, closing at 85 cents...
http://www.nytimes.com/2005/09/12/bu...rtner=homepage
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For perspective, a flashback to the heady days of 2001 when the wind was blowing the other way:
Delta, pilots reach deal
April 23, 2001: 10:08 a.m. ET
Four-year tentative pact with union averts strike, makes pilots best paid
NEW YORK (CNNfn) - Delta Air Lines won't face the risk of a pilots' strike next week after agreeing to pay billions more in a tentative contract agreement.
The agreement with the Air Line Pilots Association, reached Sunday, makes the 9,800 pilots at Delta (DAL: up $0.39 to $44.00, Research, Estimates), the nation's third largest airline, the industry's best paid. The union said it gives them raises of between 24 and 34 percent over the four-year pact.
It also closes much of the wage gap for nearly 600 additional pilots who fly 737 jets at Delta Express, the low-price carrier that flies between Florida and the Midwest and Northeast, and which had paid its pilots about 25 percent less than those who flew the same Boeing 737 jets for the mainline airline.
Those pilots would see raises of 63 percent over the life of the proposed contract. The company's previous offer had been for only a 38 percent raise for the Delta Express pilots.
An airline analyst said he wasn't all that surprised that Delta had stepped up to many of the union's demands.
"Peace at any prices appears to be a necessity," said Ray Neidl, analyst with ING Barings. "I won't say it's a good deal, but it's a necessity."
Delta's labor pains haven't completely abated though. It still faces a four-week long pilots strike at Comair Inc., its feeder airline unit that flies about half of its Delta Connection flights. That strike cost the company about $14.7 million in profit and $24 million in revenue in its first six days.
A spokesman for the union told Associated Press that the union is pleased with the tentative pact, that it would make up for concessions pilots made in 1996, when the Atlanta-based airline was emerging from several years of financial losses.
"This gives the pilots pretty much what they were looking for," said Gregg Holm, a union spokesman and Delta pilot. "I think this is going to go a long way toward repairing the rift that was caused by the 1996 contract."
Delta's statement said the agreement is good for the company.
"This tentative agreement gives Delta the financial and competitive framework required to be profitable and successful, especially in an uncertain economy," said a statement from Leo Mullin, CEO of Delta, in a statement issued Sunday.
Tentative deal will cost billions over four years
The new deal moves pay for Delta pilots ahead of pilot pay at United Airlines, the world's largest carrier. United pilots won a new deal from management of the employee-owned company last August. United has not posted a profit since, and warned last week it would lose money again in the second quarter.
Total cost of the new pact at Delta was not immediately available. The airline said earlier this month that the pilots' demands would add $3.7 billion to the airline's labor costs over four years, compared with the company's offer that he said would increase costs by $2.0 billion.
Earlier this month, Mullin had also called for intervention by President Bush to stop a possible strike, saying the two sides were too far apart to reach a deal by the 12:01 a.m. March 29 strike deadline. He said last week he had received assurances from federal officials that the President would have used his powers under labor law controlling the airline industry to keep pilots in Delta's cockpits.
The statement from ALPA did not declare victory in the deal, but said the union was pleased that it could be reached without presidential intervention.
"This is proof that if both parties are committed to the process, a solution beneficial to everyone can be reached," said Capt. Charles Giambusso, head of the union's bargaining unit at Delta.
The two sides returned to the negotiating table last Wednesday, in the middle of a 30-day cooling off period. The expiration of that cooling off period on Sunday without an agreement that would have opened the door for a strike by the pilots if there had not been Presidential intervention.
- Associated Press contributed to this report