Delta, pilots head to arbitration with strike threat on table

By: HARRY R. WEBER - AP Business Writer | Sunday, March 12, 2006 8:58 PM PST ∞

ATLANTA (AP) -- Delta Air Lines Inc. and its pilots are heading for a showdown over a second round of long-term pay and benefit cuts that could result in a strike -- and put the nation's third-largest carrier out of business.

The setting this time is Washington, instead of New York, but what's at stake for the Atlanta-based company and its 6,000 pilots is the same.

During two weeks of hearings that start Monday, Delta will ask a three-person arbitration panel to throw out its collective bargaining agreement with its pilots so it can impose up to $325 million in long-term pay and benefit cuts. The pilots union has said it will strike if its contract is voided.

The airline, which filed for Chapter 11 protection from its creditors in September, had asked the bankruptcy court in November to void the pilot contract. But shortly before a judge was set to issue a decision the company and its pilots reached a deal on interim pay cuts.

That deal, equal to slightly less than half what the company is seeking on an annual basis, would be replaced by the long-term deal the two sides have been negotiating since December. They missed a March 1 deadline to reach a deal on their own, sending the matter to arbitration.

Nothing precludes the two sides from continuing to talk during the hearings, though the company and union concede they are far apart. Both sides agreed to binding arbitration, according to court papers, but the pilots union has asserted that it believes it would still be allowed to strike if its contract is voided. The company says a strike would be illegal.

In the sides' latest proposals, the company has agreed to reduce its request to $305 million in cuts annually, while the union is offering $140 million annually.

The pilots, in late 2004, agreed to a five-year deal that cut pay and benefits then by $1 billion annually. It included an immediate 32.5 percent pay cut.

According to the company, the average salary of pilots last year who worked the full year was more than $157,000.

On the Net:

Delta Air Lines: http://www.delta.com

Pilots Union: http://crewroom.alpa.org/dal/DesktopDefault.aspx

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