Delta-Pilots near deal

[spinproof]

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[font=Trebuchet MS, Arial, Helvetica][size=-1]10-25-04 04:11 AM EST[/size][/font] [font=Times New Roman, Times, serif]HOLLYWOOD, Fla. -- Delta Air Lines (DAL) and its pilots union neared agreement on $1 billion in pilot concessions, as the airline prepared a possible bankruptcy-court filing for later this week if a final accord isn't worked out, Monday's Wall Street Journal reported.

Negotiators wrapped up talks Sunday at a Florida resort with the two sides close to an agreement. But significant gaps remained on several top issues, including how large an equity stake pilots would receive in Delta in return for steep wage and benefits cuts. Company officials have prepared to file for Chapter 11 restructuring under the U.S. Bankruptcy Code as early as Wednesday if a deal isn't reached, according to people close to the situation.

The Air Line Pilots Association, which represents more than 7,000 Delta pilots, said its negotiators were headed to the union's national headquarters in Virginia Monday, and company negotiators were to accompany them to continue the talks. The Delta union's leadership committee also traveled to Virginia for an emergency meeting.

The airline has an initial deadline Tuesday for a debt-exchange offer that it extended earlier this month after a previous proposal received little response from bondholders. The company is hoping more holders respond this time, helping the company to restructure at least a small portion of its massive debt load.

Delta has insisted that any agreement with the pilots save it at least $1 billion a year, while the pilots have pushed for changes in work rules and other contract improvements to soften the pay cutback. One person close to the talks said the union was expected to agree to a pay reduction near the 35% wage cut that management has insisted on.

Wall Street Journal Staff Reporter Evan Perez contributed to this report.

Dow Jones Newswires 10-25-04 0411ET Copyright (C) 2004 Dow Jones & Company, Inc. All Rights Reserved. [/font]

 

[ATR-DRIVR]

So is DALPA going to just give management an agreement or is it going to be sent to the pilot group for ratification?

 

[Vortilon]

Per our bylaws, the MEC will send it to the membership for ratification.

 

[ATR-DRIVR]

Right, I understand that, but what about the time line involved with it? Is there a minimum amount of time for the main body to go over it and then come up with a vote? I am just wondering if GG will take whatever the MEC comes up with and run to the judge....I sure hope not.

 

[Vortilon]

The MEC can expedite the timeline from the traditional month or so. I think the post-retirement pilot side letter only had about 7-10 days worth of road shows. This would obviously be more complex. The concessions at UAL were voted on via an expedited 2 week process, I believe.

I don't think the MEC will agree anything they think would not pass, so when an agreement is made I think GG will feel pretty confident in its passage and can focus on creditors for whatever time is remaining.

Even if a TA is announced tomorrow, and GG files on Wednesday, it doesn't mean there is an immediate imposition of workrules. It does't work that way, nor does anything happen very quickly in the bk process. In the end, the judges prefer you to work things out yourself before coming to them for arbitration.