Thursday, August 5, 2004

Union: Delta offer a 'gouge'

Pilots offer 23% pay cut, Delta asks 35%

By James Pilcher
Enquirer staff writer

Delta Air Lines' latest $1 billion concession proposal is a way to "exploit the current situation" and "gouge" the pilots, the chairman of the airline's pilot union said in a strongly worded letter to the rank-and-file Wednesday.

It was another sign that the cuts the company says are needed to survive could take awhile.

Delta reported Wednesday that system traffic was up 14 percent for June over the same month last year. That came on a 12 percent increase in systemwide capacity. The airline also saw a 7.2 percent increase in total passengers. Erlanger-based subsidiary Comair saw domestic traffic rise 19.6 percent on an 18 percent jump in domestic capacity. Comair's international traffic rose 54 percent.
Management is "foisting upon us a set of demands that far exceed the economic situation the company faces," wrote John Malone, chairman of Delta's branch of the Air Line Pilots Association, in the letter to the union's nearly 8,000 pilots. "Management's proposal appears to have only one purpose - to exploit the current situation and attack our profession by destroying our contract."

Union officials said Wednesday that the letter was not a sign that pilots were breaking off negotiations, even though Malone said that the union "will take another path" if the airline does not address pilot demands such as getting others to share the pain and creating an equity share in the airline.

"We are really trying to get a deal done," said Chris Renkel, union spokesman.

Renkel said no talks would be held until union leaders got specifics on a possible equity sharing plan and perhaps even a voting seat on the board of directors from management and further details on Delta's restructuring plan.

Delta senior vice president and chief of operations Joe Kolshak, in a memo to other workers Wednesday, said the company's latest offer was not part of a "a take-it-or-leave-it process"

"We respect our pilots ... we agree the pilot group alone cannot save Delta," Kolshak wrote.

"There was and is no intent to be punitive or to affix blame."

Malone's letter came in response to Friday's release of the Atlanta-based carrier's latest proposal for concessions from the pilots; cuts it says are necessary to survive.

Delta has lost more than $5 billion since the Sept. 11 terror attacks, including $1.96 billion in the second quarter of this year alone. The company's stock fell Wednesday, closing at $4.69.

Delta employs 4,800 at the Cincinnati/Northern Kentucky International Airport, its second-largest hub. That operation also includes nearly 800 pilots, who are part of the highest-paid pilot group in the industry.

Delta chief executive officer Gerald Grinstein wrote to pilots Friday that the company was seeking a 35 percent pay cut as part of a concession package worth more than $1 billion annually.

That came in response to a pilot offer of cuts worth between $655 million and $705 million annually that included a 23 percent pay cut.

Malone also told union members Wednesday that a more detailed analysis of the company's latest proposal would come later this week.


Air Tite founder finds new challenge in boxes
SEC complaint costs Bristol-Myers $150M
Union: Delta offer a 'gouge'
Chemed doubles quarterly earnings
Even higher oil prices predicted
Traders ride roller-coaster
Campbell's Soup reconstitutes itself
Toyota plans to boost production of hybrid cars
Tristate business summary
Business digest
Business people