Talks Will Continue Towards Final Deal In March

Members of the Air Line Pilots Association officially ratified their interim contract with bankrupt Delta Air Lines Wednesday, easing tensions between the two entities (at least temporarily) as both parties work towards a permanent deal by March.

"Given the critical nature of our financial situation, this provides much needed financial relief while we seek to reach a comprehensive agreement with ALPA," said Delta CEO Gerald Grinstein in a company release. "We greatly appreciate the additional sacrifices Delta employees -- including our pilots -- are making to help save the company. Working together, everyone's efforts are contributing to the operational progress and network improvements being made under the company's transformation plan."

As was reported earlier this month in Aero-News, the interim deal provides a 14 percent hourly wage reduction, as well as cuts in other pay and cost items equivalent to another 1 percent.

The interim agreement will result in pilot cost reductions of approximately $143 million on an annualized basis, according to Delta. The agreement is effective as of December 15, 2005, and will remain in effect while the parties seek to reach a comprehensive agreement.

"It remains our strong preference to reach a consensual agreement that is equitable and that helps Delta realize the cost reductions that will enable it to survive and to successfully restructure," Grinstein said. "I believe these are not mutually exclusive goals and, in the best interest of the company and everyone concerned, we will proceed in good faith in an attempt to realize them."

Delta has said that achieving additional annual pilot labor cost reductions is an important element of its restructuring plan. The restructuring plan calls for an additional $3 billion in annual cost reductions and revenue improvements to be realized by the end of 2007.

The $3 billion improvement target is in addition to the approximately $5 billion in annual financial benefits the company says it is on track to deliver by the end of 2006, according to Delta, as compared to 2002.

FMI: www.delta.com, www.alpa.org