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| Delta Airlines Chief: Bankruptcy Still Possible (who's next?) |
| 2004-10-28 |
| Delta Air Lines Inc. has a tentative pilot deal on concessions and much-needed breathing room, but hasn't detailed the progress of its crucial debt restructuring efforts. Delta's CEO cautioned Thursday bankruptcy remains a possibility. Until the airline's roughly 7,000 pilots ratify the $1 billion in contract concessions and Delta learns if all the pieces of its transformation puzzle fall into place in time, there is still much uncertainty for the nation's third-largest carrier. The tentative agreement with the pilots union - reached Wednesday night after nearly 18 months of intermittent talks - includes a 32.5 percent wage cut effective Dec. 1 and no raises for the rest of the five-year pact. Delta pilots are currently among the highest paid in the nation. They earn an average of $100,000 to $300,000 per year, according to the company. Among other concessions are revisions in the pension plan and work rules. In return, pilots get options to purchase Delta stock that would give them an equity stake amounting to 15 percent of the company. Delta's other major work groups, including flight attendants and gate and ticket agents, are not unionized. The company has cut the pay of its other employees, including executives' salaries. Delta has lost more than $6 billion since 2001, during which time it has also cut 16,000 jobs. Delta plans to cut up to another 7,000 jobs in the next 18 months. Last week, the struggling airline reported a $651 million loss in the third-quarter. Delta had only $1.45 billion left in cash at the end of the quarter. |
| Posted by:Mark Espinola |