As Delta Air Lines Inc. pilots were preparing to wrap up a strike authorization vote, a bankruptcy court judge Monday gave the company permission to void millions of stock options.
The pilot votes were to be tallied after polling closes at midmorning Tuesday. If approved, union leaders would be able to set a strike date, but that doesn't mean a strike would necessarily be imminent.
At issue is the Atlanta-based company's request to throw out its contract with its 5,930 pilots so it can impose up to $325 million in long-term pay and benefit cuts, which would include a wage reduction of at least 18 percent.
The pilots union has said it will strike if its contract is voided. An arbitration panel must decide on the company's contract rejection request by April 15.
Delta's pilots previously agreed to $1 billion in annual concessions, including a 32.5 percent wage cut, in a five-year deal in 2004. But Delta, which has imposed pay cuts on other employees, said it needs more from its pilots after filing for bankruptcy protection in September.
So far, there has been little movement toward a consensual deal, though both sides have met at least twice since arbitration hearings in Washington ended March 23. The union plans picketing this week at airports serving Atlanta, Boston, Cincinnati, Dallas, New York and Los Angeles.
Company spokesman Bruce Hicks declined Monday to update the status of negotiations, except to say it still hopes to reach an agreement with its pilots. Hicks said talk of the strike authorization vote isn't affecting operations, though he wouldn't say how it might be affecting flight bookings.
"Our customers continue to book Delta with confidence," Hicks said. "Our operations remain unaffected by the union's activities."
Several messages seeking comment left for the chairman of the union's executive committee, Lee Moak, were not returned.
Meanwhile, in bankruptcy court Monday in New York, Judge Adlai Hardin gave Delta permission to void roughly 93 million stock options held by 70,000 current and former employees and directors.
The company had said the options, if exercised, would provide little to no real value, making the $305,000 a year it costs the airline to maintain, account for and administer the benefit an unnecessary burden on Delta.
The judge also granted a request by Delta's bankruptcy trustee to postpone consideration of fee payments for the airline's lawyers and consultants. The payment requests, totaling $43.6 million for the first 4 1/2 months of the airline's bankruptcy case, will be taken up at a hearing on May 1.
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AP Business Writer Michael J. Martinez contributed to this report from New York.
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Delta Air Lines Inc.: http://www.delta.com
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