Delta Pilots May Have Had Enough

Getting a tentative contract agreement with pilots at Delta Air Lines(DALRQ Quote) wasn't easy. And getting the deal actually approved won't be either.

Though Delta cleared a major hurdle in reaching a preliminary pact with its pilots last week, the carrier still has plenty of work to do to maintain its franchise as one of the big three U.S. airlines. Current priorities, for instance, include resolving a labor crisis at its wholly owned regional carrier Comair, where flight attendants are threatening to strike this week.

Longer term, Delta must fix its high cost structure, even as fuel prices are rising, and produce the revenue benefits it expects from its vastly expanded international routes. In addition, the company, operating under bankruptcy protection since last September, has to resolve morale problems among its employees.

"There's a lot of angst out there," said John Urbik, a 10-year Delta pilot who questions whether the tentative contract will be approved. "We are willing to give blood to make this go, but we are not willing to finance mistakes going forward."

Delta, the nation's third-largest airline, said Friday it had reached an arrangement with negotiators from the Air Line Pilots Association, which represents about 6,000 active pilots at the carrier. Neither the airline nor the union disclosed the terms.

The deal will have to be approved by a bankruptcy court and submitted to the pilots for a vote before it can take effect. Before that occurs, union leaders will decide whether to recommend pilots approve of the deal.

Sliding Salaries

Delta had asked pilots for $305 million in annual concessions that would be achieved through an 18% pay cut and reduced benefits. Pilots have already made significant sacrifices, agreeing in late 2004 to a 32.5% pay reduction, worth about $1 billion a year.

ALPA said late Monday that the settlement terms reported Saturday in another financial-news publication weren't accurate. That report said the pilots had agreed to $280 million to $290 million in annual concessions, including a 14% pay cut and possible wage increases linked to future financial performance.