Delta Air Lines Inc. went to U.S. Bankruptcy Court Wednesday to ask a judge to allow the beleaguered airline to impose steep wage and benefit cuts on its pilots, even as a threatened pilots' strike looms if the company is successful.
Faced with rising fuel costs, Delta is seeking to slash $325 million from the collective bargaining agreement, saying the money is needed to keep its operations running. The Air Line Pilots Association, which has warned it may strike if the court approves Delta's request, has offered $90.7 million in concessions.
U.S. Bankruptcy Court Judge Prudence Carter Beatty could decide immediately on the company's request to void the pilot contract, although its considered likely that she will give the sides up to 30 more days to reach an agreement before deciding on her own.
In Atlanta Tuesday, 800 pilots' union members and spouses rallied in support of the union's position, insisting the threat of a strike was not a bluff, although Delta maintains a strike would cripple the company and force a shutdown.
In court papers filed Monday, Delta called a potential strike a "murder-suicide" that would eliminate every job at the company. The airline also argued that, under the Railway Labor Act, a strike would be illegal.
Delta pilots currently earn an average of $169,393 a year, according to a company bankruptcy court filing. The document says the figure is a projection based on year-to-date actual earnings by people employed throughout last year and up to Sept. 16 of this year. It does not include proposed pilot pay rate reductions. Junior pilots make considerably less, while senior pilots in some cases make more. The type of aircraft a pilot flies also is a factor in the pay scale.
If the court approves the cuts, they would be on top of $1 billion in annual concessions the pilots agreed to in a five-year deal reached in 2004. That deal included a 32.5 percent pay cut.
Delta, which filed for Chapter 11 on Sept. 14, has recorded losses of more than $11 billion since January 2001 and over that period has announced it would cut up to 33,000 jobs. Its loss in the third quarter, reported Thursday, was $1.13 billion.
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