Airline Bankruptcy: Delta Strike Threat Remote

Dec. 11--Despite hard-line rhetoric by Delta Air Lines pilots and executives in a New York bankruptcy court over the past two weeks, experts say the chances of their contract dispute degenerating into a strike are remote.

Pilots union leaders have threatened to call for a walkout if Delta persuades bankruptcy Judge Prudence Beatty to void their contract and let the airline impose new cuts. Delta wants changes -- including a 19 percent wage cut -- that would save $325 million a year. Beatty has prodded the two sides to cut a deal, but they remain far apart, according to testimony in the hearing, set to continue Monday.

The pilots union is offering wage cuts of about 9 percent, and leaders say calling a strike is one "self-defense" option they might use if the company imposes terms. Lawyers for the two sides disagree about whether a strike would be legal under the circumstances.

Legality aside, the union first would have to hold a strike authorization vote in coming weeks. Union members often approve such measures to boost negotiating leverage, so a vote in favor would not necessarily gauge true support for a walkout among Delta's 6,000 pilots.

Several pilots interviewed said they believed a shutdown would kill their financially stricken employer, which sought Chapter 11 protection Sept. 14 after years of huge losses. Some are preparing for other careers in case Delta fails -- but say they'd prefer to make any career change on their own terms rather than because of a strike.

The notion of a strike, however unlikely, comes at a sensitive time for the airline, which can ill afford to have worried passengers book elsewhere. Delta officials downplay the likelihood of being grounded.

"We don't anticipate any operational impact for our customers," said John Kennedy, a Delta spokesman.

Les Hough, research director at Georgia State University's Usery Center for the Workplace, said some pilots might express their displeasure through sickouts or work-to-rule actions that create short-term operational headaches. But a traditional strike at Delta, he said, is "highly unlikely."

"The only example of a strike being the pivotal event that led to a liquidation was at Eastern Airlines," Hough said. "The labor situation at Delta doesn't have anywhere near that level of acrimony. [Delta CEO] Gerald Grinstein is not a Frank Lorenzo in the eyes of its pilots."

Delta pilots were at the top of the industry wage scale from 2001 through 2004, then saw wages slashed by one-third in an eleventh-hour effort that helped the company avert a bankruptcy filing in late 2004. Soaring fuel prices and continuing losses forced a Chapter 11 filing this year, and now the company wants more labor savings as part of a broad plan to cut annual costs by $3 billion.

The company's proposed cut would slice average annual pay to $137,209 from $169,393, according to Delta. Delta already has imposed pay cuts on other workers, who aren't unionized.

Michael Boyd, an aviation consultant, said he understood the "hurt, anger and frustration" of pilots who are looking at a second big pay cut in about a year.

"This is an industry that can't pay the wages it used to pay," Boyd added. "Pilots at American and United are in the exact same position. For Delta pilots, a strike would be self-immolation, and they know it. Delta can't fly through a pilots strike. And even if it's just a work-to-rule action, Delta is so weak that anything that hobbles the airline could end up killing it."

Jim Hendricks, a Chicago lawyer who represents management clients, thinks the harsh rhetoric coming from both sides at Delta is a prelude to a settlement. Talks toward an agreement continue during the hearings.

"It's posturing," he said. "Delta pilots have shown restraint already because they know the company is in serious financial jeopardy. I think they'll go back to the bargaining table and make a deal that preserves their jobs."

Air Line Pilots Association spokeswoman Kelly Collins said the union wasn't just rattling sabers and was determined to keep "all legal options open to defend our contract."