The concession agreement between the Air Line Pilots Association (ALPA) and the country’s third-largest airline includes a 32.5 percent pay cut for Delta’s 7,000 pilots, a five-year wage freeze, and a freeze in the pension plan. Future contributions for the pilots’ pensions will be made through a 401(k) retirement savings plan, which ties pensions to the ups and downs of the stock market. The pact also includes provisions attacking conditions on the job, according to media reports.

In exchange for the steep givebacks, the bosses offered the pilots an option to purchase a 15 percent stake in the airline. Union officials had earlier suggested a compromise of pay cuts and other concessions worth $705 million, but they went along with the steeper cuts the bosses insisted on. The pilots will begin voting on the proposal November 1.

According to CNN/Money, the head of the pilots’ union called the new deal “painful,” but rationalized it as “essential to keep the airline out of bankruptcy court.”

Eighteen months ago, Delta began squeezing the pilots for major concessions. Stepping up the pressure over the past few months, Gerald Grinstein, the company’s chief executive officer, threatened to file for bankruptcy in May. In September he announced plans to slash 7,000 jobs by 2006 if the pilots did not agree to the givebacks. The company also announced that its salaried employees would take a 10 percent pay cut, reductions in sick and vacation time, and lose their health-care benefits after retirement. On October 22, Delta officials said the airline was ready to file for bankruptcy within a week if the pilots’ union did not acquiesce to their demands.

The drive for concessions at Delta follows similar moves by other major airlines. Last month, US Airways tossed out the contracts with its unions and pocketed hundreds of millions of dollars in reduced wages and benefits the airline claimed it needed to avoid liquidation. American Airlines last year used the bankruptcy scare to wrench $1.8 billion in cuts in wages and benefits from its employees.

To justify these assaults, the employers have cited stiffer competition from lower-fare airlines—such as JetBlue and AirTran—and rising fuel costs. One of these “discount” airlines, though, ATA, filed for bankruptcy protection October 26 in Indianapolis.

Meanwhile, as the airline bosses have won most of their concession demands with scarcely more than a whimper from the union officialdom, the owners’ ax is likely to keep hacking away, possibly against the same or other sections of the workforce.

“Bankruptcy remains a possibility,” said a statement from Delta’s CEO, welcoming the pilots’ concessions. And United Airlines, “whose pilots’ pay has already been cut 25 percent in its two years in bankruptcy, plans to outline plans next month for another round of cuts,” the New York Times reported October 29.  
 
 
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