Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
ATLANTA (AP) -- The Delta Air Lines pilots union is balking at a 22 percent wage-reduction proposal that is part of a companywide cost-cutting campaign.
In a memo distributed to pilots Tuesday night, the union's economic and financial analysis committee said the nation's third-largest airline needs to cut costs to survive but noted employees have already made sacrifices.
"Labor did not create this problem, and the E&FA team does not endorse management's specific proposal," the memo said. "The team has concluded, however, that all stakeholders, including labor, need to be part of the solution."
The union's financial team linked Delta's problems to a drop in revenue and new debts -- not to what it pays its pilots. The union leaders stopped short of calling for the proposal to be rejected, but said their data should be considered when members make a decision.
"Labor costs as a percentage of total expenses have been fairly flat," the memo said. "Expenses have not changed very much. Although it appears there has been a recent spike in labor expenses relative to total revenue, the main cause of the relative percentage increase in labor expenses is the reduction in revenue, not the increase in expenses."
The union said it is still gathering input from pilots before deciding on a course of action.
Last month, Delta told pilots it wants to cut their hourly wages by 22 percent, cancel pay raises due over the next year and reduce some benefits.
In addition to the pay cut for pilots, Delta wants to reduce the company contribution to a family savings plan for pilots from 3 percent to 2 percent. It also is proposing comprehensive negotiations focusing on work rules, benefits and further discussion on pay rates in the fall of 2004 or sooner, depending on the financial condition of the company.
Chief executive Leo Mullin has said Delta will use deep salary concessions agreed to at American Airlines as context for its talks with its own pilots.
Delta lost $466 million in the first quarter on top of $1.3 billion it lost last year.
Atlanta-based Delta has laid off 16,000 employees since the Sept. 11 attacks. It has also furloughed more than 1,000 pilots and said earlier this month it would furlough an additional 200 pilots this year because of a drop-off in travel due to the war in Iraq. It also plans to reduce capacity by 10 percent and will remove 12 MD-11 aircraft from service.
The pilots' union represents 9,000 Delta pilots.
(Copyright 2003 by The Associated Press. All Rights Reserved.)
