Delta, NWA Pilots Hammering Out Seniority Plan

Pilots from both sides are progressing in negotiations to draw up a seniority list for the planned merged operations.
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Talks aimed at merging pilot seniority lists are moving ahead, and could remove a key stumbling block in the merger deal between

Delta Air Lines

(DAL) - Get Report

and

Northwest

(NWA)

.

"We are moving towards a negotiated settlement," Lee Moak, chairman of the Delta chapter of the Air Line Pilots Association, said in an interview Tuesday. "I feel good that we are going to be able to negotiate a seniority list."

Six-member teams of pilots from each carrier are talking in Washington, with the goal of reaching a seniority agreement by the first week of August. If they do not succeed, outstanding issues will be turned over to a panel of three arbitrators, who will issue a ruling by Nov. 20. Even if that occurs, "we will have narrowed the issues," Moak says. Delta has about 7,000 pilots, while Northwest has around 5,100.

Moak reviewed the progress of the talks Tuesday in Atlanta with about 50 Delta pilot leaders. All signs are that the merger is moving ahead: the topic will likely be addressed Wednesday, when Delta becomes the first carrier this season to report second-quarter earnings results.

Analysts surveyed by Thomson Reuters expect earnings of 10 cents a share, which would likely make Delta one of the few airlines to report a profit for the quarter. Analysts also expect revenue of $5.4 billion, about the same they expect from

United

(UAUA)

, another sign that Delta is gaining on United to become the second largest airline, even without a merger.

Moak, personally, has taken on the role of securing a pilot seniority deal that offsets the traditional view in the airline industry, which is: "You only know you did a good job if both sides are equally mad."

"That's not true at all," he says. "What we need is people taking responsibility, people leading

to a fair and equitable list. If you try to take advantage of the other group, you have that self-fulfilling prophecy."

Moak calls the failure to get a seniority deal in the 2005 merger between

US Airways

(LSS)

and America West "a tragedy." In that case, an arbitrator's controversial seniority ruling stalled integration of the pilot groups and led to a vote that ousted ALPA. Elected pilot leaders should negotiate seniority integration, rather than "turn it over to a single arbitrator and blame him when it fails," Moak says.

The Delta/Northwest merger would benefit all pilots, Moak says. Additionally, a tentative four-year agreement reached last month provides annual raises of 4% to 5% for both groups, with Northwest pilots getting money on top of that to keep their pay in line with peer pay at Delta. Pilots would also get an ownership stake. Northwest pilot leaders could not be reached for comment.