Struggle to Save Benefits a Huge Task for Delta Retirees

Delta retirees say that the company is now a tough, pragmatic adversary, unlike the paternalistic airline that hired them decades ago.


It wasn't long after Cathy Cone and Jim Gray retired from Delta Air Lines that they got what may be the toughest --- and at times most frustrating --- jobs of their lives.

As the heads of organizations that represent Delta retirees in the airline's Chapter 11 case, Cone and Gray have labored untold and unpaid hours fighting uphill battles to save pensions and other benefits for thousands of their former colleagues.

Both say Delta is now a tough, pragmatic adversary, unlike the paternalistic airline that hired them decades ago. Like most companies restructuring in Chapter 11, the airline wants to emerge with a lighter load of retiree liabilities.

Key battles over pensions are winding down, with mixed results. Another issue, preserving medical benefits, is just heating up.

"I would like to see an end, but I think the end is in the distant future," said Cone, who said she has often worked 60-hour weeks on retiree issues over the past three years. "I mean, when does Delta stop being fragile?"

A bankruptcy judge last week agreed that Delta should be allowed to terminate its pilot pension plan, a move that will mean reduced benefits as a quasi-federal agency takes over payouts. But Gray's group, the Delta Pilot Pension Preservation organization, or DP3, didn't oppose termination because it had reached a financial settlement with Delta.

Meanwhile, Cone's group helped Delta successfully lobby Congress for legislation that the airline says should enable it to keep its traditional pension plans for flight attendants and ground workers. A new pension-relief law gives Delta 17 years to fully fund the plan --- more than double the time other companies have.

Cone isn't shy about the role of her 10,000-member group, Delta Air Lines Retirement Committee, or DALRC.

"The reality was I carried voters to Washington," said Cone, who also chairs a court-appointed committee representing nonpilot retirees.

Cone, a grandmother of five who has lived all her nearly 60 years in Houston, at first glance might seem an unlikely person to be taking on the nation's third-largest airline and its platoon of big-league lawyers.

She joined Delta in 1966, taking what she thought was a summer job as a reservations clerk in Houston between terms at Texas Tech in Lubbock. But she stayed on as a flight attendant.

"That decision lasted 36 summers," she said with a laugh.

Cone began to emerge from the rank and file in 1990, when Delta created a flight attendants group to advise management. She said it was an antidote to rising union sentiment among the ranks.

That grew into a post representing flight attendants on an employee council that sat in on the airline's board of directors meetings. She held that post until 2000.

"I learned a lot in that four years, traveling around and answering questions," said Cone. The job put her in contact with a wide swath of Delta employees, explaining what Delta's management was up to and answering questions about benefits and other issues.

A year after she left the council, the 9/11 terrorist attacks turned an industry downturn into a nose dive, especially for older carriers such as Delta. Cone joined thousands of Delta employees who took early retirement packages in 2002.

But her old employer's troubles gnawed at her. By 2003, Delta's cumulative losses were in the billions of dollars.

Employees and retirees were livid over disclosures that top executives got bonuses and protected pension trusts while other workers lost jobs and the red ink deepened. Pilots were balking at contract concessions.

Cone said she realized a Chapter 11 filing was a growing possibility --- and suspected the assurances she'd once given employees about the safety of their pensions might be proved wrong.

"I felt responsible," she said. "I said, you know what, I am going to make sure people understand what they have and what they don't, and we need to make sure we protect it as best as we can, and we need to start now."

This content continues onto the next page...

We Recommend