General Lee
Well-known member
- Joined
- Aug 24, 2002
- Posts
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NEW YORK, Jan 12 (Reuters) - The pilots' union of Delta Air Lines (DALRQ.PK: Quote, Profile , Research) reiterated its opposition on Friday to a takeover of the bankrupt airline by rival US Airways Group (LCC.N: Quote, Profile , Research), saying it had committed $15 million to the effort to ensure the bid fails.
The union, a vocal opponent of the takeover bid, is one of the nine members of Delta's official committee of unsecured creditors. The committee has a key role in deciding the future of the bankrupt airline.
US Airways offered to buy Delta on Nov. 15 and earlier this week raised its bid by about 20 percent to $10.5 billion. It has said that any job cuts under its plan would be carried out through voluntary leaves of absence and attrition.
The bid has been opposed by most Delta employees. The pilots' unions at America West and US Airways -- the two airlines that merged to form US Airways Group -- have also expressed reservations. But earlier this week the chief of the America West pilots' union said he was "neutral" to the bid and focused on protecting the interests of its members.
The Delta chapter of the Air Line Pilots Association said the new offer did not address issues it had raised earlier, including antitrust concerns, route overlaps, job losses and provisions of its contract with Delta.
It also said the increased offer would raise the debt load of the combined company by $1 billion.
"Delta pilots will not change any provision of our contract in order to facilitate the hostile takeover of our company," Lee Moak, chairman of the union's master executive council, wrote in a memo to pilots.
"As such, the MEC remains totally committed and one hundred percent focused on one thing -- the death of the US Airways' merger attempt," he added. (Additional reporting by John Crawley in Washington)
And this directly to the pilots from LEE MOAK today:
Parker mistakenly believes that he can somehow magically overcome the scope protections built into our contract and to date refuses to discuss the contract in anything other than superficial terms. The Delta PWA is a part of Delta's Plan of Reorganization and must be a part of any such plan of reorganization. Parker, however, simply ignores the implications of our contract. For example, in response to just a single issue, he has been quoted as saying, "We don't know enough about the contract and how this clause came to be." Pilot contract issues will not go away regardless of how much money Parker throws at this merger. For example, our contract:
o Prohibits a "code-sharing" relationship between Delta and US Airways that is critical to the success of the merger plan.
o Dictates that, in the event of a merger, our contract is the controlling document and all provisions remain in force, provisions which prevent many planned US Airways synergies.
o Provides that the amount of Delta flying cannot decrease during a merger transition period until full operational integration, a period that would take years.
o States that Delta pilots must fly any aircraft configured for over 76 seats. US Airways would be prohibited from operating an entire portion of their fleet of aircraft as a result of this provision.
o Most importantly, the Delta pilot contract is binding on any successor or affiliate, including a transaction where Delta is bought by another carrier or holding company subject to the provisions of Letter of Agreement 7, Bankruptcy Protection Covenant.
The Delta pilots will not change any provision of our contract in order to facilitate the hostile takeover of our company.
Bye Bye--General Lee
The union, a vocal opponent of the takeover bid, is one of the nine members of Delta's official committee of unsecured creditors. The committee has a key role in deciding the future of the bankrupt airline.
US Airways offered to buy Delta on Nov. 15 and earlier this week raised its bid by about 20 percent to $10.5 billion. It has said that any job cuts under its plan would be carried out through voluntary leaves of absence and attrition.
The bid has been opposed by most Delta employees. The pilots' unions at America West and US Airways -- the two airlines that merged to form US Airways Group -- have also expressed reservations. But earlier this week the chief of the America West pilots' union said he was "neutral" to the bid and focused on protecting the interests of its members.
The Delta chapter of the Air Line Pilots Association said the new offer did not address issues it had raised earlier, including antitrust concerns, route overlaps, job losses and provisions of its contract with Delta.
It also said the increased offer would raise the debt load of the combined company by $1 billion.
"Delta pilots will not change any provision of our contract in order to facilitate the hostile takeover of our company," Lee Moak, chairman of the union's master executive council, wrote in a memo to pilots.
"As such, the MEC remains totally committed and one hundred percent focused on one thing -- the death of the US Airways' merger attempt," he added. (Additional reporting by John Crawley in Washington)
And this directly to the pilots from LEE MOAK today:
Parker mistakenly believes that he can somehow magically overcome the scope protections built into our contract and to date refuses to discuss the contract in anything other than superficial terms. The Delta PWA is a part of Delta's Plan of Reorganization and must be a part of any such plan of reorganization. Parker, however, simply ignores the implications of our contract. For example, in response to just a single issue, he has been quoted as saying, "We don't know enough about the contract and how this clause came to be." Pilot contract issues will not go away regardless of how much money Parker throws at this merger. For example, our contract:
o Prohibits a "code-sharing" relationship between Delta and US Airways that is critical to the success of the merger plan.
o Dictates that, in the event of a merger, our contract is the controlling document and all provisions remain in force, provisions which prevent many planned US Airways synergies.
o Provides that the amount of Delta flying cannot decrease during a merger transition period until full operational integration, a period that would take years.
o States that Delta pilots must fly any aircraft configured for over 76 seats. US Airways would be prohibited from operating an entire portion of their fleet of aircraft as a result of this provision.
o Most importantly, the Delta pilot contract is binding on any successor or affiliate, including a transaction where Delta is bought by another carrier or holding company subject to the provisions of Letter of Agreement 7, Bankruptcy Protection Covenant.
The Delta pilots will not change any provision of our contract in order to facilitate the hostile takeover of our company.
Bye Bye--General Lee
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