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Tuesday, November 1, 2005 Union: Delta ready to void pilots' pact
By James Pilcher
Enquirer staff writer
Delta Air Lines plans to ask a bankruptcy judge to reject its contract with its pilots union within the next few days, the carrier’s branch of the Air Line Pilots Association told its members today.
The news came less than two weeks after the airline’s lone major unionized work group voluntarily entered into talks over the $325 million in annual concessions Delta was seeking as it restructures under Chapter 11 bankruptcy protection.
If the judge sides with the company and rejects the contract, that could mean that management could impose its own work rules and pay temporarily. If a final version is not agreed to eventually, the pilots could walk out, although a union at an airline under bankruptcy protection has never tested that situation.
“We were interested and committed to bridging this gap between what we could do now and a long-term agreement, and management asked us to enter those negotiations,” union spokesman John Culp said. “But management was clearly not committed to the process – they would not engage and did not follow through.”
The move came on the same day that all non-union workers at Delta took pay cuts, as previously announced. Front-line workers saw their pay cut of 7 percent to 9 percent, while senior managers and executives received cuts of up to 15 percent. Delta chief executive officer Gerald Grinstein had his $500,000 annual salary cut 25 percent to $375,000. The non-union employees took an earlier pay cut Jan. 1.
Delta has lost more than $10 billion in the past four years and filed for bankruptcy protection Sept. 14. The nation’s third-largest airline, Delta employs nearly 700 pilots at the Cincinnati/Northern Kentucky International Airport, its second-largest hub, and more than 7,000 system wide.
The airline had not officially filed for rejection of the contract under Section 11-13 of the bankruptcy code as of late last night.
“While Delta remains open to reaching a consensual agreement to achieve the needed pilot cost reductions, the urgency of our financial situation requires that we move forward quickly,” Delta spokesman John Kennedy said last night.
Kennedy said that if such a motion were made to the bankruptcy court, the company would not ask for more than the $325 million already sought from the pilots.
Management apparently acted today because the talks were not progressing fast enough.
Delta provided the union another version of its position Monday night along with an ultimatum to reach a tentative agreement within three hours, according to union officials. Then this morning, the company told the union of its plans to go to the court, according to a voice mail to all pilots.
“Theoretically, this talking could have gone on for months, and the company is out of time,” said Mike Boyd, president of Colorado-based aviation consulting group The Boyd Group. “This is not like a normal negotiation – the company set the bottom line and that was it. This is not a time to play kabuki theatre at the bargaining table.”
Once such a motion is made, a hearing involving both parties would be held between two and three weeks from the filing date. Then, the judge has up to 30 days to render a decision; with several criteria listed in the law as to what standards the company has to meet before the contract could be voided.
The two sides could still work out a voluntary deal in the meantime, as did United Airlines and its flight attendant union.
But if it no agreement is reached, and the judge decides on behalf of the company, Delta could impose the pay scales and work rules initially proposed at the hearing and in the filing.
That would be an interim solution however, and both sides would have to agree to make it permanent.
If such an agreement can’t be reached, the pilots might have the option of walking off the job, although a strike has never been legally tested in bankruptcy and such a move would certainly cripple – if not kill – the airline.
Experts said it is unclear whether such an action would be legal under the Railway Labor Act, which governs labor relations in the airline and railroad industries.
When asked if such a strike could be possible, Culp said that the union would “consider all legal remedies.”
The $325 million in cuts that Delta wants from the pilots would include a 19.5 percent pay cut, according to one version of the company’s proposal. That would come on top of the $1 billion the union gave back late last year to stave off bankruptcy then – cuts that included a 32.5 percent pay cut for all pilots.
Delta pilots are paid between about $34,000 for a starting first officer to about $194,000 a year for a senior wide-body captain, although most mid-career pilots earn between $100,000 to $150,000 annually.
Earlier today, Kentucky Lt. Gov. Steve Pence met with Delta vice president of community affairs Doug Blissit at the airport in Hebron to get an update on Delta’s condition and to offer support on behalf of the state. Delta and its Erlanger-based subsidiary Comair plan to cut at least 1,000 jobs total and 26 percent of its flights from Cincinnati on Dec. 1.
Pence referred any specific questions about local job cuts to Delta, and said that no specific proposals as to state aid were discussed in the meeting.
“Delta is as important to Kentucky as Churchill Downs, Toyota or Lexmark,” said Pence. “We just wanted to see if there was anything that we could do for them … It’s a testament to the state when it can stick by companies in the bad times, and then we can reap the rewards of the expansions in the good times.”
Delta said Blissit would not be available for comment.
E-mail [email protected]
By James Pilcher
Enquirer staff writer
Delta Air Lines plans to ask a bankruptcy judge to reject its contract with its pilots union within the next few days, the carrier’s branch of the Air Line Pilots Association told its members today.
The news came less than two weeks after the airline’s lone major unionized work group voluntarily entered into talks over the $325 million in annual concessions Delta was seeking as it restructures under Chapter 11 bankruptcy protection.
If the judge sides with the company and rejects the contract, that could mean that management could impose its own work rules and pay temporarily. If a final version is not agreed to eventually, the pilots could walk out, although a union at an airline under bankruptcy protection has never tested that situation.
“We were interested and committed to bridging this gap between what we could do now and a long-term agreement, and management asked us to enter those negotiations,” union spokesman John Culp said. “But management was clearly not committed to the process – they would not engage and did not follow through.”
The move came on the same day that all non-union workers at Delta took pay cuts, as previously announced. Front-line workers saw their pay cut of 7 percent to 9 percent, while senior managers and executives received cuts of up to 15 percent. Delta chief executive officer Gerald Grinstein had his $500,000 annual salary cut 25 percent to $375,000. The non-union employees took an earlier pay cut Jan. 1.
Delta has lost more than $10 billion in the past four years and filed for bankruptcy protection Sept. 14. The nation’s third-largest airline, Delta employs nearly 700 pilots at the Cincinnati/Northern Kentucky International Airport, its second-largest hub, and more than 7,000 system wide.
The airline had not officially filed for rejection of the contract under Section 11-13 of the bankruptcy code as of late last night.
“While Delta remains open to reaching a consensual agreement to achieve the needed pilot cost reductions, the urgency of our financial situation requires that we move forward quickly,” Delta spokesman John Kennedy said last night.
Kennedy said that if such a motion were made to the bankruptcy court, the company would not ask for more than the $325 million already sought from the pilots.
Management apparently acted today because the talks were not progressing fast enough.
Delta provided the union another version of its position Monday night along with an ultimatum to reach a tentative agreement within three hours, according to union officials. Then this morning, the company told the union of its plans to go to the court, according to a voice mail to all pilots.
“Theoretically, this talking could have gone on for months, and the company is out of time,” said Mike Boyd, president of Colorado-based aviation consulting group The Boyd Group. “This is not like a normal negotiation – the company set the bottom line and that was it. This is not a time to play kabuki theatre at the bargaining table.”
Once such a motion is made, a hearing involving both parties would be held between two and three weeks from the filing date. Then, the judge has up to 30 days to render a decision; with several criteria listed in the law as to what standards the company has to meet before the contract could be voided.
The two sides could still work out a voluntary deal in the meantime, as did United Airlines and its flight attendant union.
But if it no agreement is reached, and the judge decides on behalf of the company, Delta could impose the pay scales and work rules initially proposed at the hearing and in the filing.
That would be an interim solution however, and both sides would have to agree to make it permanent.
If such an agreement can’t be reached, the pilots might have the option of walking off the job, although a strike has never been legally tested in bankruptcy and such a move would certainly cripple – if not kill – the airline.
Experts said it is unclear whether such an action would be legal under the Railway Labor Act, which governs labor relations in the airline and railroad industries.
When asked if such a strike could be possible, Culp said that the union would “consider all legal remedies.”
The $325 million in cuts that Delta wants from the pilots would include a 19.5 percent pay cut, according to one version of the company’s proposal. That would come on top of the $1 billion the union gave back late last year to stave off bankruptcy then – cuts that included a 32.5 percent pay cut for all pilots.
Delta pilots are paid between about $34,000 for a starting first officer to about $194,000 a year for a senior wide-body captain, although most mid-career pilots earn between $100,000 to $150,000 annually.
Earlier today, Kentucky Lt. Gov. Steve Pence met with Delta vice president of community affairs Doug Blissit at the airport in Hebron to get an update on Delta’s condition and to offer support on behalf of the state. Delta and its Erlanger-based subsidiary Comair plan to cut at least 1,000 jobs total and 26 percent of its flights from Cincinnati on Dec. 1.
Pence referred any specific questions about local job cuts to Delta, and said that no specific proposals as to state aid were discussed in the meeting.
“Delta is as important to Kentucky as Churchill Downs, Toyota or Lexmark,” said Pence. “We just wanted to see if there was anything that we could do for them … It’s a testament to the state when it can stick by companies in the bad times, and then we can reap the rewards of the expansions in the good times.”
Delta said Blissit would not be available for comment.
E-mail [email protected]
