Airline Wants $325 Million In Pilot Pay Concessions

On the same day it secured a total of $1.9 billion in debtor-in-possession financial backing, Delta Air Lines announced it will take the issue of pilot pay concessions to the bankruptcy courts, if necessary, in the beleaguered airline's quest to emerge from Chapter 11.

Delta CEO Gerald Grinstein (file photo, above) stated Thursday he is prepared to use the bankruptcy courts to force pilots to accept a total of $325 million in concessions, according to the Associated Press. Grinstein made the comments at an event announcing plans to launch nonstop service between Delta's Atlanta, GA base and Tel Aviv in March.

Grinstein said the pilots union has been unwilling, so far, to negotiate with Delta. "We've asked them, but they've not been willing to consent," he said.

"I don't want to prejudge what they are going to do," he added.

Unlike other workers affected by Delta's plan to cut $930 million in annual operating costs overall -- including the airline's plans to shed as many as 9,000 jobs -- the pilots essentially have the choice of either agreeing to the concession plan, or else have the cuts imposed on them by the courts. So far, the pilots union has taken a hard stance against willingly submitting to new pay concessions.

"We will make Herculean efforts to impress upon Delta management that the Delta pilots will not be their ATM," union chairman Lee Moak wrote in a letter to pilots Saturday. Last year, the pilots union agreed to $1 billion in annual concessions, a move intended to help stave off bankruptcy then.

The announcement on pilot pay concessions came as Delta announced it had secured a total of $1.9 billion in DIP financing. The funding is intended to help the carrier continue normal operations during bankruptcy proceedings, and will also be used to pay down existing, higher-interest loans.

FMI: www.delta.com