Blames Pilot Union For Failure To Ratify Contract

Delta Airlines had been set to acquire 40 new Boeing 737-900ERs and 20 previously-flown Embraer E190 airplanes on the condition that its pilot's union ratified a new contract with the carrier.

But last week, the rank and file pilots voted to reject the contract. The aviation blog of the Dallas Morning News reports that Delta Airline's CEO Richard Anderson says that means no new airplanes.

"Those orders will be cancelled," Anderson said.

On the Delta Pilot's website, the union said that the contract was rejected because through the bankruptcy process, the pilot group had its pay "slashed by nearly 50%, had our pension essentially dissolved, and had many quality-of-life work-rules eliminated. The company is now making historic profits that exceed every expectation. Yet the pilots have not had our pension restored, our work-rules restored, nor our pay rates restored.  Management, on the other hand, has rewarded themselves handsomely, far exceeding their pre-bankruptcy compensation.

"According to DPA Open Surveys, the Delta Pilots expected to be fully restored to 2004 pay rates on date of signing plus some follow-on annual raises that begin to correct the 11 years of lost buying power to inflation.  Our surveys showed Pilots expected 18% on date of signing and 5% follow-on raises annually.  The pay came in far below that at 8% on date of signing with 6%, 3%, and 3% annually. Nearly all of the 6% was paid for by sacrificing 50% of our profit sharing from $2.5B to $6B and a change to the PTIX definition such that profit is not calculated until after executive compensation has been awarded.  The pay fell far short and required us to self-fund a large portion of the increase.  The reduction in profit sharing benefited management at the expense of other employee groups. Pilots also expected a significant improvement to our retirement and health care benefits.  The agreement did nothing to improve active or retired health care and only offered a 1% increase in retirement pay, and not until 2017."

Bloomberg Business reports that ALPA declined to comment on Anderson's statement that the new airplane purchase would be cancelled.

FMI: www.delta.com