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Fri, Dec 05, 2003

Delta Pilots Offer 9% Pay Cut

Airline Wanted Much More

The airline wanted 30 percent. Instead, the most well-paid pilots in the business Thursday offered just nine percent in wage concessions -- their contribution to improving the airline's ailing bottom line. Pilots also offered to give back a pay raise contracted for next year. Delta says that's going to mean its costs are about $1 billion higher than its competitors.

Committee members think Delta wants wage concessions along the lines of those granted by bigger bankrupt airlines like American and United.

The union's negotiating committee said it "does not believe (Delta's) pilot costs must be aligned with the pilot costs at restructured or bankrupt airlines for our company to be profitable."

Wall Street reacted positively to the pilots' offer, but analysts are now starting to worry. "While the market may respond positively to the simplistic notion of labor progress at Delta, the inadequacy of the pilot's proposal highlights that serious, protracted negotiations lay ahead," JP Morgan airline analyst Jamie Baker told the Washington Post.

That process appears to be underway. One one hand, analysts like Baker think Delta will thumb its nose at the offer. On the other hand, the two sides are talking again after breaking down earlier in the year.

FMI: www.delta.com

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