Delta Air Lines Inc. is prepared to use the bankruptcy court to achieve $325 million in cost concessions from its pilots if the company and union can't reach a deal on their own, chief executive Gerald Grinstein said Thursday.
Grinstein made the comment after an event at the Carter Center to announce the airline's plans to launch nonstop service from its Atlanta base to Tel Aviv in March.
On Sept. 22, eight days after filing for bankruptcy, Delta said it is targeting $930 million in annual savings from its employees, including $325 million from pilots. The cuts are part of a new turnaround plan that will shed up to 9,000 more jobs.
Unlike Delta's other work groups, the pilots union has to agree to its cuts or have the cuts imposed on the union in bankruptcy court.
Asked Thursday if Delta is prepared to use the courts to get the cuts it is seeking from pilots, Grinstein told the Associated Press, "Yes."
Grinstein said the union so far has been unwilling to negotiate the cuts with the company.
"We've asked them, but they've not been willing to consent," Grinstein said.
He said the union has asked for certain information to help it make its decision, which the company has been providing.
"I don't want to prejudge what they are going to do," Grinstein said.
He added that from the company's standpoint, Delta would like to have the pilot cuts agreed upon by Nov. 1, though he's unsure that will happen.
"Time is a real pressure on us," he said.
Union spokesman John Culp said the organization has had fact-finding meetings with management but wants more information from the company before deciding whether to enter formal negotiations with Delta regarding the concessions.
He declined to respond to Grinstein's comment regarding the use of the bankruptcy court to get the cuts.
In a letter Saturday to pilots, the new chairman of the union's executive committee, Lee Moak, said the union faces "unprecedented challenges," but will not be hasty in making decisions.
"We face challenges to our pay, to our work rules, to our retirement, to our way of life," Moak said. "That is our reality. But while we may be reluctant participants in this process, we will not be victims."
Moak said the union's negotiating committee continues to analyze the company's proposal. He said he anticipates calling the union's executive committee into special session in the next few weeks to receive their report and to provide direction.
"We will make Herculean efforts to impress upon Delta management that the Delta pilots will not be their ATM," Moak wrote.
A year ago, the union agreed to $1 billion in annual concessions to help Delta avoid bankruptcy. But fuel prices soared, and Delta was forced to file for Chapter 11 anyway.
Also Thursday, Grinstein said Delta continues to push for pension reform in Congress. He said the proposal by some lawmakers to allow airlines to spread their employee pension payments over 14 years is not enough. He said 20 years may work for Delta, though the company has been pushing for 25 years to meet its funding obligations.
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