Delta Seeks to Void Pilots' Union Contract
Delta Airlines has asked a federal judge to void its contract with its pilots' union, saying cuts to the company's operating costs are needed if the carrier is to survive. The request could turn out to be a major showdown over the airline's future.
RENEE MONTAGNE, host:
Delta Air Lines and one of its most important unions are headed for what could turn into a major showdown over the direction of the airline. Yesterday, Delta asked a federal judge to void its contract with the pilots union. The airline filed for bankruptcy in September and says it needs to cut costs to stay in business. The pilots union says it has already agreed to big pay cuts and won't approve anymore. NPR's Jim Zarroli reports.
JIM ZARROLI reporting:
Yesterday's hearing took place in a sweltering Manhattan courtroom on an unseasonably warm autumn afternoon. So many reporters and lawyers turned out that there was barely any standing room. Delta officials say nothing less than the airline's future is at stake right now. With rising fuel prices and competition from low-cost carriers, the company insists it needs to make big cuts in its operating costs if it's to survive.
Attorney Jack Gallagher spoke to reporters afterward.
Mr. JACK GALLAGHER (Attorney): We are now in an intensely competitive environment. Unless we become a cost-efficient airline and get our costs down to a level where they match our revenues, then the future is bleak.
ZARROLI: The airline has already won wage concessions from some employees, but it says it needs an additional $325 million in cash each year. And it wants its 6,000 pilots who earn on average almost a hundred and seventy thousand dollars a year to accept a wage cut of about 19 percent. Lee Moak, president of the pilots union, says that doesn't include big reductions in pension fund contributions, not to mention a billion dollars in wage concessions the union has already agreed to.
Mr. LEE MOAK (President, Pilots Union): We really believe in this airline. However, when you take a 50 percent pay cut and you lose your pension totally, you have no alternative. We're willing to work with them, but not under those conditions.
ZARROLI: Moak said the union had agreed to previous pay cuts because its own financial analysts had said they were necessary. But this time, he said, the airline has gone too far.
Mr. MOAK: In the history of Delta labor relations, we've never had a strike, ever. We've always been able to work out a consensual agreement in good times and also in bad times. And this is the first time where management has had to go to an outside entity and, in this case, the bankruptcy judge to try to reject our contract that we've worked under for in excess of 50 years.
ZARROLI: The union's lawyer, Bruce Simon, went even further at the hearing, saying there had been an irreparable breach of trust between the pilots and Delta's management. `Let us now mourn Delta's culture,' he said, `It is no more.' Simon asked Judge Prudence Carter Beatty to resign from the case, accusing her of bias. He cited comments she'd made about the pilots', quote, "hideously high salaries." The judge refused to resign saying the comments were taken out of context. Later, she reserved some of her most caustic remarks for Delta's management. She said the company was throwing darts at the pilots because she said, `They're smaller than you and you can stomp on them.' But Delta attorney, Jack Gallagher, suggested the pilots would sooner or later have to face reality.
Mr. GALLAGHER: And I understand resistance, but I'd suggest that in this case, it's somewhat misguided resistance and that they should look at what has happened at Northwest, look what has happened at USAir. And, God forbid, they should look at what's happened to Pan Am and TWA. This is not a bargaining game.
ZARROLI: Delta officials also say talk of a strike right now by the pilots amounts to a murder-suicide pact, one that would hurt all Delta employees. The hearing is expected to continue this afternoon and last for several days. The judge can then rule on the request to void the pilots' contract or give the two sides more time to reach an agreement. Jim Zarroli, NPR News, New York.
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