Promises Employees Lump Sum Cash Bonuses

It appears a bit of the long-dormant "Spirit of Delta" may soon return to Delta Air Lines. The Atlanta, GA-based carrier announced this week that, as its financial picture improves, so would its employees' checkbook balances.

CNN Money reports the airline sent a letter to its employees, broadly outlining a new compensation program to be instituted when the carrier emerges from bankruptcy.

Delta, the nations' Number 3 airline, did not specify amounts of the improved pay or cash bonuses -- only that they would be instituting a profit-sharing plan to distribute 15 percent of its pre-tax income.

As the carrier struggled to avoid bankruptcy in 2004, it was able to save $1.6 billion in labor costs through concession contracts with labor unions -- but rising fuel costs forced Delta into bankruptcy anyway in 2005. While in bankruptcy, the airline was able to save an additional $930 million per year through even harsher labor cost cuts.

The company told employees when they finally emerge from bankruptcy, all would receive a "lump sum" cash bonus that would equal a percentage of their pay. As of its last bankruptcy court filing, Delta had 55,700 employees.

Employees also stand to receive a grant of unrestricted stock, that they would be able to sell without restriction. Top executives will be granted restricted shares, performance shares and options.

"We're moving towards an industry-standard pay structure to ensure your pay rate becomes and remains competitive with network and low-cost carriers, including American, United, AirTran, JetBlue and Southwest," the company's letter said.

"While we won't be able to do that all in one step, we'll take the first step in that direction this summer -- and officers and directors won't have any across-the-board pay increases until all those steps are complete," the letter continued.

Delta also promised a new retirement benefit plan. The previous traditional pension plan was terminated in bankruptcy.

The company deemed the poll of funds allocated to fulfilling this promise will be distributed based on performance and current pay position.

FMI: www.delta.com