By James Pilcher
Enquirer staff writer

ATLANTA - Delta Air Lines and its pilots union tonight reached an agreement on financial concessions that the company insists are necessary for it to stay out of bankruptcy.

The two sides reached the agreement in talks at the Air Line Pilots Association's headquarters in Herndon, Va., outside Washington, D.C.

Details of the deal weren't known late tonight. The deal must be submitted to the airline's nearly 8,000 pilots - roughly 800 of them based at the Cincinnati/Northern Kentucky International Airport - for their approval, a step that will likely take place next week.

Company sources had that Atlanta-based Delta was prepared to go to court for bankruptcy protection tonight or Thursday morning, if no deal was reached. The airline's pilots are the best paid in the industry, thanks to a contract reached just before the 9/11 attacks that have helped reshape the economics of the airline industry.

The sources also said a filing would include Delta's Erlanger-based regional subsidiary Comair, the third-largest regional airline in the country.

The two companies jointly employ more than 8,000 at CVG, Delta's second-largest hub.

Delta had been warning for weeks that bankruptcy would be the only option without $1 billion worth of annual concessions, two-thirds of which would consist of a 35 percent pay cut for all pilots.

Such a filing would be one of the 10 largest in U.S. history and the biggest airline bankruptcy ever, based on the total assets involved.

Delta, the nation's third-largest carrier, has lost $6.2 billion in the last three years, including $646 million in the last quarter. In addition, the company has been burning through its cash reserves, although it did secure $600 million in new financing from American Express this week.

But that loan is contingent upon a pilot deal, according to the company's filing to the Securities and Exchange Commission, putting more pressure on the two sides to agree.

Delta's stock closed at $4.94 today, up 6.7 percent on the day, but down significantly from its interday high of $5.20, with shares dropping as the day progressed and no deal materialized.

Earlier today, neither Delta nor the union would comment on the talks. The pilots were thought to be seeking guarantees on a new contract and work rules, since Delta may still have to file bankruptcy due to high fuel costs and other outside pressures. The company wanted most of the givebacks in straight pay.

Delta also wouldn't discuss the results of an early filing deadline for a debt exchange offer. The offer provided a bonus for holders of about $2.5 billion in Delta debt who responded by midnight Tuesday. The airline's move to restructure part of its $20.6 billion debt is the second prong of its anti-bankruptcy effort.

The offer would give the debt holders about 35 cents on the dollar. Bondholders at bankrupt United and US Airways have received or are expected to get less than 5 cents on the dollar.

E-mail jpilcher@enquirer.com