DELTA CUTS

Here are details of the cuts announced Tuesday by Delta Air Lines that apply to all non-union workers (including about 3,200 locally). All the moves take effect Jan. 1: • 10 percent pay cut. • As yet undetermined increases in health insurance premiums. • Maximum allowable vacation reduced to five weeks annually from six weeks. • Elimination of health benefits for retirees for those who retire after Jan. 1. • Creation of an early retirement program allowing workers to leave the company with either health or travel benefits. What the cuts mean For a 28-year flight attendant: Salary drops from about $50,000 annually to $45,000. Health care costs increase; loss of a week of vacation; increased work load (as a result of changes that took place in January 2004); the loss of health care benefits upon retirement. For a 20-year mechanic: Salary drops from about $80,000 to $72,000 annually. Health care costs to increase; loss of a week of vacation; no longer receive double time and a half for working on holidays, now only time and a half; the loss of health care benefits upon retirement. For a 5-year airport customer service agent: Salary drops from about $36,000 annually to $32,400. Health care cost increase; faces limit of 5 weeks of vacation, when eligible; the loss of health care benefits upon retirement. Sources: Delta Air Lines; various employees

The reductions will take effect Jan. 1 and will affect about 3,200 workers locally at Cincinnati/Northern Kentucky International Airport - Delta's second largest hub - and its downtown phone reservation center.

The Atlanta-based carrier said the moves, along with a planned reduction of 6,000 to 7,000 jobs and the closure of its hub in Dallas/Fort Worth, would save $1 billion annually.

"This is painful and difficult, particularly because you already have been affected in various ways and you are working harder than ever before," company chief executive officer Gerald Grinstein told the airline's 60,000-plus workers in a memo Tuesday.

"I did not want nor intend to ask everyone for more sacrifice. But regrettably, the industry environment and our company's worsening financial situation have deepened the gap between where we are and where we must be to survive and succeed over the long term."

Many Delta workers said they knew cuts were coming. But that didn't stop the sting.

"They can't keep chopping from the bottom and expect the airline to stay standing," said one mechanic with 20 years experience. "But on the other hand, I've got to accept it. I've got too much at stake to walk away. If it means we don't file for bankruptcy, I guess we'll all have to live with it."

The Enquirer is not naming local employees due to a Delta policy that can punish workers for speaking with the media.

Overall, the company has lost more than $5 billion over the last three years and is looking to reduce costs to stay afloat in the radically changing airline industry.

In return for the cuts, Delta said it was creating a profit sharing and incentive program for workers that will be unveiled by year's end. Early retirement programs, which would allow workers to keep either their health care benefits or their travel benefits, also are being crafted.

"We have a small window of opportunity available to us to avoid Chapter 11 that some other carriers do not have," wrote Grinstein, "It is in everyone's best interest that we protect Delta's future by taking these steps together now."

Grinstein said the cuts will apply to all executives and he is forgoing the rest of his $500,000 annual salary for the rest of the year.

At the same time it is cutting non-union workers' pay, Delta continues to wrangle with its pilots union. It wants to wrest $1 billion annually worth of concessions from its lone major union, another key if the company is to avoid bankruptcy, analysts said. So far, the pilots have only offered $705 million in cuts.

On Tuesday, the union announced that its members had ratified a side agreement allowing the company to rehire recently retired pilots. The union made the deal in return for Delta's promise that it would not alter the pilots' pension plan until early next year.

Previously, the company said it would declare bankruptcy as early as next week if the issue of early retirements were not solved. Delta needed to stop the retirements, triggered by uncertainty over the airline's future, because it feared it would have to ground jets on lucrative international flights because it didn't have enough qualified cockpit crews.

Negotiations for an overall agreement are to resume this week. Delta management again is warnings that without an agreement, it could declare bankruptcy - although it has given no deadline.

Investors cheered both the cuts and the pilot agreement Tuesday, sending Delta's stock up 13.6 percent to close at $3.34.

"This is very significant ... they've always overpaid and paid like a union shop to keep the unions out, and their ability to do that has long since past," said Helane Becker, airline analyst with The Benchmark Group LLC, pointing out Delta can impose these cuts unilaterally because only its pilots and dispatchers are unionized.

"But it is only the first step ... without pilot cooperation and restructuring their debt, they can kiss it all goodbye."

As for workers, many were disappointed at the cuts, adding at the same time that they were about what they expected. The company originally announced its intentions to cut worker pay on Sept. 8.

The program also includes:

• Reducing vacation time for senior workers from six weeks to five.

• Increasing health care premiums by an unspecified amount.

• Eliminating health care benefits for those who retire after Jan. 1, 2005.

A senior flight attendant said the cuts were about half of what was expected. "But it's still going to be a hit, especially when the insurance premiums kick in," said the flight attendant, who has worked for Delta for 28 years. "Something had to happen, though, in order for the company to try and ensure its survivability."

The pay cuts will not apply to Delta's Erlanger-based regional subsidiary Comair, which employs more than 4,000 locally.

But company spokesman Nick Miller said Comair anticipated that Delta would lower the fees it pays for regional flying next year.

"So we'll continue monitoring our pay and benefits programs as well as other costs," said Miller.

E-mail jpilcher@enquirer.com