Delta, Northwest pilots move closer to a strike
Advertiser News Services
Advertiser News Services
Pilots at the nation's third- and fourth-largest air carriers — Delta Air Lines Inc. and Northwest Airlines Corp. — yesterday moved a step closer to striking after failing to reach separate agreements on steep pay and benefits cuts, which both airlines say they need to emerge from Chapter 11 bankruptcy protection.
Meanwhile, Northwest yesterday reached a tentative agreement with the negotiators of its flight attendants union. The agreement, which must be voted on by the flight attendants, calls for $195 million in pay and benefit cuts.
Delta and its pilots union now begin a 45-day arbitration process in which an outside panel will review the airline's proposed cuts and issue a decision.
As part of its effort to reach an agreement, Delta reduced its request to $305 million in annual pay and benefit cuts, down from $325 million. Without the cuts, the airline could be forced to liquidate, Delta spokesman Bruce Hicks said. Delta's 6,000 pilots are offering about $115 million in concessions. In 2004, Delta's pilots agreed to a five-year deal that included a 32.5 percent pay cut and about a $1 billion reduction in benefits per year.
Despite entering arbitration, Delta and its pilots will continue negotiations, Hicks said. "We are committed to reaching a consensual, negotiated, comprehensive agreement," he said. "For Delta to be able to exit bankruptcy, we have to have a consensual pilot contract."
Delta said in a memo circulated among employees yesterday that it has offered to increase its pilots pay 1.5 percent at the end of 2008 and another 1.5 percent in 2009. Delta is now offering its pilots a $330 million note instead of $300 million if it terminates the pilots' defined-benefit pension plan. The pilots are asking for a $1 billion note.
Delta also said it has offered its pilots equity in the company once it emerges from bankruptcy. Its memo didn't say how much.
Two members of the three-person arbitration committee were appointed by the pilots union, and one was named by Delta. The committee will meet in Washington. The first meeting is scheduled for March 13.
To obtain its cost-savings target, Delta must throw out its existing pilots' contract and replace it with a less-costly one. The pilots object to the move and have threatened to strike. If the arbitration panel sides with Delta and the pilots fail to reach an agreement with the airline, the pilots could walk off their jobs by mid-April, pilot spokesman Curly Culp said.
A day after Northwest's 5,000 pilots authorized a strike after failing to reach a cost-cutting agreement, both sides continued to negotiate yesterday as they wait for a bankruptcy judge to rule on Northwest's request for $145 million in pay and benefits cuts from its pilots. Northwest is trying to reduce its annual labor costs by $1.4 billion.