By James Pilcher
The Cincinnati Enquirer

As talks continue between Delta Air Lines and its pilots union about potential pay cuts, the company's second-highest executive said Tuesday the carrier might have to shrink if costs are not lowered.

Delta president and chief executive officer Fred Reid said that could mean further layoffs, although he did say more job cuts would be a last resort and that none are currently planned.

"The possibility definitely exists ... we will do everything we have to do to avoid bankruptcy," said Reid, pointing out that the nation's third-largest airline is hoping to expand its large-jet flying next year. It will add two international flights out of Cincinnati, its second largest hub, for example.

"We shook hands and agreed on the current contract, but we are no longer competitive and cannot continue this way," Reid said in a telephone interview. "It would be one of the last things we would look at, but it could become a reality if there was no other alternative."

Delta already has cut 16,000 positions since the Sept. 11, 2001, terror attacks crippled the entire airline industry. The company employs about 4,500 workers locally at the Cincinnati/ Northern Kentucky International Airport, including almost 900 pilots. Delta officials have not said specifically how many were laid off locally, but it was not thought to be a high number since many senior employees work here.

The company restarted talks last month with its 8,500-member branch of the Air Line Pilots Association after similar attempts to get pay cuts broke down in June. Previously, the company had said it was seeking a 22 percent pay cut and a freeze on future wage increases.

The pilots countered by saying they wanted the current contract, which expires in 2006, to be extended further if it were to be amended. The lone major union at Delta, ALPA is under no obligation to open its contract. Union officials did not return phone calls seeking comment.

E-mail jpilcher@enquirer.com