Delta Air Lines Inc.'s refusal to budge on its demand for $325 million in permanent pay and benefit cuts from its pilots could jeopardize the two sides' efforts to hammer out a comprehensive agreement by a March 1 deadline, a top union official said Wednesday.
If a tentative agreement on permanent cuts isn't reached by then, a three-person arbitration panel would decide whether to grant the Atlanta-based company's request to void the pilot contract.
If the contract is rejected, Delta has warned that it will impose the cuts it is seeking unilaterally. The chairman of the pilot union's executive committee, Lee Moak, said in a telephone interview that if the contract is set aside, a pilot strike remains an option.
"Their actions have put us in this position," said Moak of management. He was in Washington with union leaders who were meeting to discuss the situation.
A Delta spokesman, John Kennedy, said the company's need for $325 million in concessions is important, and added that it was the union that wanted to hold off negotiations until after its internal meetings this week.
"We have said we need the $325 million and have justified this amount in court, and our need has not changed since then," Kennedy said. "But, how we get there is what we want to work out with (the union) during the upcoming negotiations."
Last month, the nation's No. 3 airline, which filed for bankruptcy in September, reached a tentative agreement with its 6,000 pilots on interim pay cuts of 14 percent in wages and other cuts equal to an additional 1 percent wage reduction.
In the talks on a permanent agreement, Moak said the union is currently offering about $115 million in average annual concessions over four years. But he said the company is refusing to come down from $325 million.
"If one party will not negotiate, it's hard to characterize it as a negotiation," Moak said.
He said for now he's holding onto the strike ballot that union leaders authorized before the interim agreement was reached in December. He hasn't ruled out sending the ballot to rank-and-file pilots for a vote if the arbitration panel ultimately rejects the pilot contract.
"If they refuse to negotiate and our contract is rejected, therefore we would not willingly work without a contract," Moak said. "Therefore, we would choose the time and place to perform a job action."
He said that action could include a strike.
Moak said union negotiators and management met last week and are scheduled to meet again next week.
Kennedy said Delta wants to reach a consensual agreement, but he wouldn't say whether it is willing to come down off the current amount it is seeking.
"Our pilots understand that a sound company is the best job and retirement security there is," Kennedy said.
The permanent cuts the two sides are negotiating would be on top of a 32.5 percent pay cut the pilots agreed to in 2004 as part of a $1 billion annual concessions package. The term of that agreement was five years.
Delta has reported $11.6 billion in losses since January 2001. It is scheduled to report its fourth-quarter and year-end 2005 results on Feb. 14.
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