Union: Delta, Pilots' Offers Apart By 2.2 Percent

A pilots union analyst Tuesday said Delta Air Lines has slashed costs more than most competitors and that the union's concession offer comes close to Delta's proposal when tallying future costs.


She said Delta's unit costs excluding fuel --- the expense of flying one seat one mile --- were less than 7 cents. That compared with about 8 cents at most big carriers. She said Delta's unit costs dropped 17 percent in the year before its Chapter 11 filing. That compared with a 5 percent decline for most carriers.

McAhron-Schultz said her analysis showed that other big hub-and-spoke carriers "have significantly more competition with the low-cost carriers" than Delta. She said discount carriers compete with other big carriers in about 75 percent to 80 percent of their markets, compared with 65 percent of Delta's.

"We believe Delta's largest competitors are the other network carriers," she said.

Delta's biggest problem, ALPA's experts claim, is weak revenue rather than costs. The union says Delta has been a step behind American, United and other big rivals in shifting aircraft to more profitable international routes, where there is little competition with discount carriers.

Delta draws the smallest share of its revenue from overseas markets of the big U.S. airlines but has been rapidly adding international flights since it filed bankruptcy six months ago.

But Bastian said Tuesday it will take "several years" to grow Delta's international business enough to eliminate the gap with other network carriers. In the meantime, he said, Delta needs to cut costs to compete with discount carriers that are "clearly targeting" Delta's markets.

The arbitration hearing resumes today.



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