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Another 229 Delta Air Lines Pilots Retire
Harry Weber, AP
ATLANTA - Another 229 Delta Air Lines Inc. pilots have retired, locking in their retirement benefits ahead of a 32.5 percent pay cut scheduled to go into effect Wednesday, according to union officials at the struggling airline.
Those pilots whose retirements take effect Wednesday will receive retirement benefits based on their salaries before the pay cuts, said Karen Miller, a spokeswoman for the pilots union. Retiring pilots can also elect to receive half their pension benefits in a lump sum and the other half as an annuity later - a move that could ensure they receive at least some payout even if Delta later files for bankruptcy.
The departures come as pilots begin to feel the effects of the sweeping $1 billion concession package they approved last month in hopes of keeping Delta out of bankruptcy. The union also agreed to a 16 percent reduction in vacation pay, changes to the composition of the pension plan and increased cost sharing for active pilot and retiree medical benefits.
Delta issued a statement Wednesday downplaying the retirements, saying it did not "foresee any disruptions to our operation."
But the airline, which had told pilots the concessions were crucial for its survival, took a more concerned tone in a regulatory filing two weeks ago.
"If our pilots retire prior to their normal retirement at age 60 at greater than historical levels, this could disrupt our operations," Delta said in a Nov. 15 Securities and Exchange Commission filing.
The airline was not more specific, but a large number of retirements could strain the airline's staffing and financial resources - particularly if the retirees take the lump sum payment.
Before Wednesday's announcement, 694 Delta pilots had already retired this year. And, as of mid-November, about 2,000 of the airline's roughly 7,000 active pilots were eligible to retire, according to the airline.
To try to ease staffing shortages, Delta reached an agreement with the pilots union in late September to allow pilots who retire early to return to duty on a limited basis. But the program is voluntary for pilots and is an option for those who sign a waiver before retiring, the union's Miller said.
Only three of 71 pilots who retired early on Oct. 1 were rehired under the agreement, according to the SEC filing.
Miller had said Tuesday that at least 100 pilots were expected to retire effective Wednesday. But pilots had until midnight Tuesday to decide, and more apparently opted to leave.
Of those who submitted their papers by Wednesday, 197 were early retirements, she said. The normal pilot retirement age at Delta is 60. Senior pilots with enough years of service can retire early at age 50.
Shares of Delta edged up 10 cents, or 1.4 percent, to $7.07 in late morning trading Wednesday on the New York Stock Exchange.
Harry Weber, AP
ATLANTA - Another 229 Delta Air Lines Inc. pilots have retired, locking in their retirement benefits ahead of a 32.5 percent pay cut scheduled to go into effect Wednesday, according to union officials at the struggling airline.
Those pilots whose retirements take effect Wednesday will receive retirement benefits based on their salaries before the pay cuts, said Karen Miller, a spokeswoman for the pilots union. Retiring pilots can also elect to receive half their pension benefits in a lump sum and the other half as an annuity later - a move that could ensure they receive at least some payout even if Delta later files for bankruptcy.
The departures come as pilots begin to feel the effects of the sweeping $1 billion concession package they approved last month in hopes of keeping Delta out of bankruptcy. The union also agreed to a 16 percent reduction in vacation pay, changes to the composition of the pension plan and increased cost sharing for active pilot and retiree medical benefits.
Delta issued a statement Wednesday downplaying the retirements, saying it did not "foresee any disruptions to our operation."
But the airline, which had told pilots the concessions were crucial for its survival, took a more concerned tone in a regulatory filing two weeks ago.
"If our pilots retire prior to their normal retirement at age 60 at greater than historical levels, this could disrupt our operations," Delta said in a Nov. 15 Securities and Exchange Commission filing.
The airline was not more specific, but a large number of retirements could strain the airline's staffing and financial resources - particularly if the retirees take the lump sum payment.
Before Wednesday's announcement, 694 Delta pilots had already retired this year. And, as of mid-November, about 2,000 of the airline's roughly 7,000 active pilots were eligible to retire, according to the airline.
To try to ease staffing shortages, Delta reached an agreement with the pilots union in late September to allow pilots who retire early to return to duty on a limited basis. But the program is voluntary for pilots and is an option for those who sign a waiver before retiring, the union's Miller said.
Only three of 71 pilots who retired early on Oct. 1 were rehired under the agreement, according to the SEC filing.
Miller had said Tuesday that at least 100 pilots were expected to retire effective Wednesday. But pilots had until midnight Tuesday to decide, and more apparently opted to leave.
Of those who submitted their papers by Wednesday, 197 were early retirements, she said. The normal pilot retirement age at Delta is 60. Senior pilots with enough years of service can retire early at age 50.
Shares of Delta edged up 10 cents, or 1.4 percent, to $7.07 in late morning trading Wednesday on the New York Stock Exchange.
Hopefully Delta can pull through and get the furloghees flying.
