Wed, Dec 28, 2005
Talks Will Continue Towards Final Deal In March
Members of the Air Line
Pilots Association officially ratified their interim contract with
bankrupt Delta Air Lines Wednesday, easing tensions between the two
entities (at least temporarily) as both parties work towards a
permanent deal by March.
"Given the critical nature of our financial situation, this
provides much needed financial relief while we seek to reach a
comprehensive agreement with ALPA," said Delta CEO Gerald Grinstein
in a company release. "We greatly appreciate the additional
sacrifices Delta employees -- including our pilots -- are making to
help save the company. Working together, everyone's efforts are
contributing to the operational progress and network improvements
being made under the company's transformation plan."
As was reported earlier this month in
Aero-News, the interim deal provides a 14 percent
hourly wage reduction, as well as cuts in other pay and cost items
equivalent to another 1 percent.
The interim agreement will result in pilot cost reductions of
approximately $143 million on an annualized basis, according to
Delta. The agreement is effective as of December 15, 2005, and will
remain in effect while the parties seek to reach a comprehensive
agreement.
"It remains our strong preference to reach a consensual
agreement that is equitable and that helps Delta realize the cost
reductions that will enable it to survive and to successfully
restructure," Grinstein said. "I believe these are not mutually
exclusive goals and, in the best interest of the company and
everyone concerned, we will proceed in good faith in an attempt to
realize them."
Delta has said that
achieving additional annual pilot labor cost reductions is an
important element of its restructuring plan. The restructuring plan
calls for an additional $3 billion in annual cost reductions and
revenue improvements to be realized by the end of 2007.
The $3 billion improvement target is in addition to the
approximately $5 billion in annual financial benefits the company
says it is on track to deliver by the end of 2006, according to
Delta, as compared to 2002.
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