wasn't delta one of the airlines to receive the largess of govt loans -- taxpayer guaranteed -- due to alleged 9/11 losses a couple of years back?
also, what kind of salary cuts is top management taking?
R
Delta Pilots OK Steep Wage Cuts, Easing Bankruptcy Fears November 11, 2004
By Evan Perez Staff Reporter of The Wall Street Journal
ATLANTA -- Pilots of Delta Air Lines Inc. (DAL) voted to ratify a new five-year contract that cuts wages and benefits by $1 billion a year.
The Air Line Pilots Association said 79% of its members that cast ballots approved the concessions, which include a 32.5% wage cut, changes to work rules that increase the amount of flying pilots are required to do and a switch to a cheaper retirement plan for younger pilots.
In return for the concessions, Delta is awarding its pilot group options for 30 million shares, plus future profit sharing and other incentives. The union said that of the 6,756 pilots eligible to vote, 91% did.
Delta has been counting on pilot ratification of the agreement to help secure a series of new financing arrangements lined up in recent weeks, most of which were contingent on getting a "yes" vote from pilots. The pilot cuts take effect next month.
In January, Delta is imposing a 10% wage cut on its nonunion workers along with increased employee-benefit costs.
The third-largest U.S. airline narrowly avoided filing for bankruptcy court protection two weeks ago when it struck the last-minute deal with the pilots, its only major union group, after more than 15 months of talks.
Delta has tallied more than $6 billion in losses since 2001, and in its most recent quarter was burning cash at a rate of up to $5 million a day. Suffering from near-record oil prices and continuing fare wars, Delta and other major airlines are engaged in a vicious cycle of cost-cutting that shows no sign of stopping.
Recently, AMR Corp.'s (AMR) American Airlines, the biggest U.S. airline, announced it may have to make more job cuts, and UAL Corp.'s (UALAQ) United Airlines, the second-biggest, said it wanted to make another round of wage cuts and dump its pension plans to help save cash as it nears two years in bankruptcy. US Airways Group Inc. (UAIRQ) is signaling that it, too, may have to terminate its remaining pension plans to save money.
Delta's cuts -- coupled with the new round of cuts at other airlines -- help keep pressure on big rivals such as Northwest Airlines Corp. (NWAC) to seek deeper cuts from their employees.
John Malone, chairman of the Delta union's executive council, said, "We have bought Delta time to continue restructuring outside of the courts. It is now up to management to successfully execute a viable business plan."
How much time the pilot deal buys Delta is unclear. In recent weeks, Delta has announced more than $1.4 billion in new cash and financing deals, aimed at tiding over the struggling airline as it tries to implement a turnaround plan unveiled in September. The plan includes closing Delta's money-losing Dallas hub and reworking more than half the company's route system and its giant Atlanta hub. Up to 6,900 U.S. jobs will be cut under Delta's plan.
But the company also is struggling due to its heavy debt load, which is at $20.6 billion and rising. So far, Delta has restructured little of that debt, with much of it in secured bonds that are nearly impossible to restructure outside of bankruptcy.
-By Evan Perez; The Wall Street Journal; 404-865-4383; evan.perez at wsj.com
(END) Dow Jones Newswires
11-11-04 1657ET