NYTimes.com Article: Delta to Meet With Pilots in Hopes of Restarting Salary Talks

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Delta to Meet With Pilots in Hopes of Restarting Salary Talks

October 9, 2003
 By EDWARD WONG





The top executives of Delta Air Lines will meet with
leaders of the union that represents its pilots on Oct. 17
to talk about the airline's financial condition and
possibly work out a way to restart negotiations over wage
cuts, Delta's president said yesterday.

The executive, Frederick W. Reid, said in an interview in
Manhattan that he and other officials, including Leo F.
Mullin, the chief executive, would meet with half a dozen
leaders of the Air Line Pilots Association. The union broke
off talks on pay cuts late in July, saying that it was not
willing to allow the levels of wage cuts that Delta was
seeking and that it wanted its current contract extended.
The contract was signed in 2001 and is valid until May
2005.

Mr. Reid, referring to the airline's desire for wage cuts,
said, "We will reiterate our request for midcontract
negotiations as a crucial part of turning around Delta Air
Lines."

Delta's pilots have the highest wages in the industry and
those must come down, he said, if the airline is to remain
competitive. In the last year, American Airlines and United
Airlines have both won pay concessions from their labor
groups.

American did this through negotiations, while United, which
is operating under bankruptcy protection, threatened to
void its union contracts. Those two airlines are the only
ones larger than Delta in this country.

A spokesman for the pilots' union, Mike Pinho, did not
return phone calls seeking comment yesterday.

The pilots agreed in June to start talks with Delta on pay
cuts. Delta asked the pilots for a total of 31 percent in
cuts in existing wages and negotiated future raises. The
union balked at Delta's demands and left the table on July
23.

At the time, the union, which represents 9,000 pilots, said
it would not accept pay cuts as large as those imposed on
pilots at the other airlines. Union leaders also said they
wanted an extension of the current contract and demanded
that Delta look for cost cuts from its other employee
groups and from its suppliers and lessors.

The pilots are the only unionized labor group at Delta.


Mr. Reid said yesterday that management's relationship with
the union had always been "civil, courteous, positive," and
that the pilots had rightly agreed in the past to let Delta
fly more regional jets and to let the airline enter into a
code-share marketing partnership with Continental Airlines
and Northwest Airlines.

But Mr. Reid also said that Delta could be at a competitive
disadvantage if labor groups were not willing to help it
bring down its costs. He called labor costs the "largest
single factor in airline competitiveness."

Several moves in recent years by Delta's managers have
angered the pilots. The union has complained that the
company misused a force majeure clause - which gives it the
ability to lay off workers during times of extreme
distress. Like other airlines, Delta laid off large numbers
of workers after the Sept. 11 attacks, invoking the force
majeure clause and citing those attacks as the reason.

But an arbitrator ruled early this year that Delta could no
longer use that reason for layoffs. The airline then laid
off more workers starting in April, citing the United
States-led invasion of Iraq and the ensuing drop in traffic
as the justification. In July, before calling off wage
reduction talks, the pilots filed a grievance, saying the
airline was again misusing the force majeure provision to
lay off pilots.

http://www.nytimes.com/2003/10/09/business/09AIR.html?ex=1066705388&ei=1&en=2315807453942479


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