Delta Pilots Have Five Weeks to Weigh Proposal

Pilot Michael Dunn isn't sure which way he'll vote on a tentative agreement with Delta Air Lines, even though he's one of a half-dozen volunteers who will try to sell the deal to about 600 Salt Lake City-based company pilots.

"This is just from the perspective of a Delta pilot who will have to vote yes or no," Dunn said Monday. "It looked more concessionary than I imagined, but there's also some potential upside that I didn't expect."

Late Friday, leaders of the Air Line Pilots Union ratified an agreement with bankrupt Delta that averted a strike but keeps a 14 percent pay cut in place since December. It also promises a small raise next year.

The deal would give Delta's 6,000 pilots some help if the company scraps its defined pension plan, which it said it probably will do. Pilots will get an interest-bearing note of $650 million with a 15-year term. The company had offered a $330 million note, while the union wanted $1 billion.

Pilots will also get a stake in the company if it successfully emerges from a Chapter 11 bankruptcy reorganization.

Delta says the four-year deal includes changes to pay, benefits and work rules that will save it about $280 million a year, less than the $305 million it sought during negotiations.

"We believe the structure and key elements of this agreement provide the competitive framework necessary for the company's successful reorganization, Ed Bastian, Delta's chief financial officer, said Saturday.

The deal now goes to rank-and-file union members. Dunn said voting will start May 15 and run to the end of the month. The contract, which also would face approval by the bankruptcy court, would become effective June 1.

Dunn said he was pleased that pilots wouldn't have to endure another pay reduction on top of the cut they accepted in January.

"We've already given that money up, and there will be some sort of a 1.5 percent raise, come January of next year. That's better than a sharp stick in the corner of the eye or an additional pay cut," he said.

Dunn said he is waiting for more details before he and five or six other volunteers begin educational meetings with local aviators, who will also receive publications and memos from the union, whose leaders voted 12-to-1 to recommend the agreement to members.

"It is a concessionary agreement, there's no question about that," said Ed Thiel, a Salt Lake-based member of the union's council who cast one of the 12 "yes" votes. "But in the context of being in bankruptcy court, I think we minimized the damage to our contract."

Thiel said the union was able to keep pay rates in the mid-range of the major airlines. Work rules weren't changed. And the pilots' defined retirement benefit plan will be converted to a defined contribution plan, he said.

"There are some things I don't like and [that will] upset the pilots. But on the whole, we basically broke the template of what happened to pilots at other airlines in bankruptcy," Thiel said.

In other contracts, he said, pilots conceded a pay cut, then the company came back with other demands. Delta pilots negotiated one package, which should meet the carrier's needs without seeking further modifications.

A simple majority is needed to ratify the contract. If it's rejected, Delta could seek to impose the full cuts it was seeking. The union had threatened to strike if an arbitration panel had allowed the company to void its contract with pilots.

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