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Delta arbitration probable as pilot deal unlikely
Wed Mar 1, 2006 12:09 PM ET
NEW YORK, March 1 (Reuters) - Delta Air Lines Inc. (DALRQ.PK: Quote, Profile, Research) is unlikely to reach an agreement by a Wednesday deadline on pilot wage and benefit cuts the carrier says it needs to survive, an airline spokesman said on Wednesday.
"It's not practical to believe that there would be an agreement today," Delta spokesman Bruce Hicks said. "We're just far apart."
A failure to reach a deal on more than $300 million in annual givebacks the bankrupt airline is seeking will trigger an arbitration proceeding on the No. 3 U.S. airline's bid to tear up the contract.
Delta is the latest in a series of carriers who say they need employee concessions to survive. Northwest Airlines Corp. (NWACQ.PK: Quote, Profile, Research), which sought bankruptcy protection on the same day as Delta, is in a similar standoff with its pilots and flight attendants.
Motions to void union collective bargaining agreements are usually ruled on by federal bankruptcy judges, but in this case Delta's pilots struck a deal to have the contract issue decided by a three-person arbitration panel.
Two of its members have been chosen by the union, part of the Air Line Pilots Association, and one by the airline, Hicks said.
Officials at the union, which has asked ALPA for a $10 million contingency fund and has opened a strike center in Delta's home city of Atlanta, could not immediately be reached for comment.
The concessions Delta is seeking from the pilots, the airline's only major unionized word force, are part of $3 billion in cost savings and revenue increases the airline has said it needed to survive.
The union, which agreed to a previous round of pay cuts to help Delta avoid a previous brush with bankruptcy, has argued that the airline hasn't gone far enough in seeking cost reductions elsewhere.
Talks between the union and the company on a consensual deal will continue even as the arbitration process ramps up, Hicks said.
"The beginning of the arbitration process doesn't end the negotiation process," he said. "It's not a light switch."
Under an agreement reached by Delta with the pilots in December, the arbitration hearings are scheduled to take place in Washington the weeks of March 13 and 20, with a ruling due by April 15.
© Reuters 2006. All Rights Reserved.
Wed Mar 1, 2006 12:09 PM ET
NEW YORK, March 1 (Reuters) - Delta Air Lines Inc. (DALRQ.PK: Quote, Profile, Research) is unlikely to reach an agreement by a Wednesday deadline on pilot wage and benefit cuts the carrier says it needs to survive, an airline spokesman said on Wednesday.
"It's not practical to believe that there would be an agreement today," Delta spokesman Bruce Hicks said. "We're just far apart."
A failure to reach a deal on more than $300 million in annual givebacks the bankrupt airline is seeking will trigger an arbitration proceeding on the No. 3 U.S. airline's bid to tear up the contract.
Delta is the latest in a series of carriers who say they need employee concessions to survive. Northwest Airlines Corp. (NWACQ.PK: Quote, Profile, Research), which sought bankruptcy protection on the same day as Delta, is in a similar standoff with its pilots and flight attendants.
Motions to void union collective bargaining agreements are usually ruled on by federal bankruptcy judges, but in this case Delta's pilots struck a deal to have the contract issue decided by a three-person arbitration panel.
Two of its members have been chosen by the union, part of the Air Line Pilots Association, and one by the airline, Hicks said.
Officials at the union, which has asked ALPA for a $10 million contingency fund and has opened a strike center in Delta's home city of Atlanta, could not immediately be reached for comment.
The concessions Delta is seeking from the pilots, the airline's only major unionized word force, are part of $3 billion in cost savings and revenue increases the airline has said it needed to survive.
The union, which agreed to a previous round of pay cuts to help Delta avoid a previous brush with bankruptcy, has argued that the airline hasn't gone far enough in seeking cost reductions elsewhere.
Talks between the union and the company on a consensual deal will continue even as the arbitration process ramps up, Hicks said.
"The beginning of the arbitration process doesn't end the negotiation process," he said. "It's not a light switch."
Under an agreement reached by Delta with the pilots in December, the arbitration hearings are scheduled to take place in Washington the weeks of March 13 and 20, with a ruling due by April 15.
© Reuters 2006. All Rights Reserved.
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