Leaders of Delta Air Lines' pilots union are expected to meet Wednesday in New Orleans to begin deciding whether to accept a tentative contract negotiators signed last week, averting a looming strike threat.
Union officials have kept close wraps on the details, disputing a published report over the weekend that the pact will save Delta up to $290 million a year and result in a 14 percent wage cut for pilots, cementing a temporary cut of the same amount that's been in force since December.
The Wall Street Journal, citing unnamed sources, reported that the proposed concessions would save Delta roughly $280 million to $290 million annually, close to the $305 million Delta sought. The deal includes potential future wage increases based on Delta's financial results, the newspaper reported.
A spokesman for the Air Line Line Pilots Association disputed some details but declined to offer clarification.
"The numbers quoted ... are inaccurate," said ALPA spokesman Mike Pinho. "ALPA will not publicly comment on the specifics of the tentative agreement prior to our governing body and our pilots having a chance to read the agreement, digest it and ask questions concerning the agreement."
In addition to wage cuts, other agreements expected in the proposal deal with profit-sharing for pilots and compensation for retirement benefit changes that will likely result from Delta's Chapter 11 restructuring.
The airline has indicated it will probably terminate its traditional pension plan for pilots, shifting responsibility for limited payouts to the Pension Benefit Guaranty Corp.
Negotiators rushed last week to cobble together an agreement announced last Friday, before an arbitrator panel was scheduled Saturday to decide whether to void the pilots' labor contract, allowing Delta to impose its own terms. The union had vowed to strike as early as this week if that happened.
The union's Master Executive Council must decide whether to send the pact to Delta's 5,930 pilots for a ratification vote, which would probably take about a month.
Some industry-watchers say union leaders face a ticklish job winning rank-and-file members' support for another pay cut after pilots agreed to a 32.5 percent pay cut in 2004. The temporary 14 percent pay cut, which didn't include other concessions or an agreement tied to the termination of their pension plan, passed by a small margin.
Northwest Airlines, which filed for Chapter 11 protection the same day as Delta, is in the midst of a ratification vote on a similar concessionary pilot contract. The Northwest outcome could affect the Delta vote, some experts suggest.
"If Northwest pilots ratify their tentative agreement, it will put more pressure on Delta pilots to ratify their deal as well," said Michael J. Boyd, an airline consultant. "Pilots pay close attention to what's going on with their peers throughout the industry. What happens at one carrier won't go unnoticed at the others."
Chivalry aside, it's best to let the other go first.
Pilots at Eagan, Minn.-based Northwest are scheduled to tally electronic ballots on May 3.
Although the details of the Delta deal haven't been released, airline industry experts say the pattern has been established at other carriers: pay concessions roughly equal to "interim" agreements; an end to defined-benefit pensions; and pilots getting minority airline ownership when their companies emerge from bankruptcy court protection.
Pilots are the only large labor group at Delta represented by a union. But its Comair subsidiary faces a similar contract showdown with flight attendants, who have threatened to start job actions if Delta's bankruptcy judge allows the company to void their contract.
Union officials have kept close wraps on the details, disputing a published report over the weekend that the pact will save Delta up to $290 million a year and result in a 14 percent wage cut for...
The nation's fifth-largest carrier said it will implement concessions approved by pilot and mechanics unions. Discussion will continue with flight attendants.
The nation's fifth-largest carrier said it will implement concessions approved by pilot and mechanics unions.
The union will also hold a simultaneous strike authorization vote in case the tentative agreement.