By James Pilcher
Enquirer staff writer

Delta Air Lines is close to settling an issue with its pilots union that the carrier fears could send it into bankruptcy as early as next month, company chief executive officer Gerald Grinstein said Monday.

Grinstein, speaking at a conference of partner airlines in New York, said he thought an agreement on early pilot retirements could be reached by the end of this week.

But union spokeswoman Karen Miller responded that there are no negotiations scheduled for this week, especially since union leaders began a two-day meeting in Virginia Monday to discuss the retirement issue and get an update on Delta's financial status.

"An agreement in that timeframe seems unlikely," she said.

Still, the union told its 7,500 members in a voice mail message late last week that its negotiating committee had reached a "side letter" with management to the existing contract that would expand an already existing side agreement regarding early retirements.

"The goal of these side letters is to help Delta staff categories affected by early retirements," union spokesman Chris Renkel said in the message, adding that the newest side letter needed to be mutually agreed upon by both sides.

Union officials would not discuss details of the new side agreement but it is thought to only be a short-term solution.

Grinstein said last week that if the early retirement issue were not settled permanently by the end of this month, the company would be forced to file for Chapter 11 bankruptcy protection.

The airline is trying to plan for the early retirement of senior pilots, who are leaving faster and earlier than normal because of the threat of bankruptcy and what could happen to their pensions if they stay. Grinstein last week estimated that 2,000 pilots are older than 52 - pilots must retire at 60 - and who could be looking to retire.

Delta officials are concerned that if too many retire in one airplane type, especially larger planes that fly lucrative overseas routes, the company will have to ground planes while other pilots are trained. Compounding the problem is that the pilots do not need to give advance warning, and that they can retire at the end of the month.

The lack of long-haul pilots and flights could dampen Delta's cash flow, officials say, leading to the likelihood of bankruptcy.

But the union says no flights have been scratched because of the early retirement issue.

Grinstein said that the company had to use more management pilots than necessary to cover affected flights in June. Some analysts have said that Delta also may be asking for more advance warning for these retirements.

The Atlanta-based airline, which operates its second-largest hub locally, has lost more than $5 billion in the last three years. Delta also has been trying for more than a year to get its pilots, including more than 800 who are based at the Cincinnati/Northern Kentucky International Airport, to agree to extensive concessions worth $1 billion annually.

Grinstein also said Monday that the company was meeting with bankruptcy lawyers just in case Chapter 11 becomes unavoidable. He continued to refuse to give an overall timetable as to when the company might file.

In other Delta news, the airline saw its domestic partners and competitors Northwest and Continental as well as Dutch airline KLM join the SkyTeam international alliance. Delta was a founding member of the multi-airline alliance that also includes Air France, Alitalia and Aeromexico.

Delta already has an agreement with Northwest and Continental that allows sharing of some data as well as selling seats on each other's flights but selling them as their own. Most trips originating from the Cincinnati/Northern Kentucky International Airport are not eligible for that arrangement due to competitive reasons.

The agreement forced the move of Northwest and Continental to Delta's Terminal 3 here shortly after it was approved last year.

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E-mail jpilcher@enquirer.com