WASHINGTON, Oct 27 (AFP) - Troubled Delta Air Lines and its pilots late Wednesday reached a tentative agreement that both sides hope will allow the company to significantly cut its operating costs and avoid bankruptcy, a union official announced.
"Late this afternoon, your negotiating committee reached a tentative agreement with Delta management on a pilot costs savings package," Chris Renkel, a leading negotiator said in a brief statement.
However, he declined to release any details of the deal, saying the leadership of the Delta Air Lines pilots union must first review the agreement later Wednesday.
Calls to union headquarters in Atlanta, Georgia, have remained unanswered. The company offered no immediate comment.
The third-largest US airline has been seeking up to one billion dollars in concessions from its 7,000 pilots in order to remain afloat as skyrocketing fuel prices and cut-throat competition from discount carriers have dealt major airlines a staggering blow.
Earlier this month, Delta unveiled a restructuring plan that would cut 6,000 to 7,000 jobs and slash costs by five billion dollars a year by 2006.
But losses kept mounting. The company admitted last week that they had nearly quadrupled in the third quarter of this year, leaving it little choice but implement further cuts.
From July through September, net losses mushroomed to 646 million dollars, or 5.16 dollars a share over that period of time, compared to a year-earlier loss of 164 million dollars, or 1.36 dollars a share, the carrier reported.
Losses per share amounted to 4.73 dollars -- deeper than the loss of 4.26 dollars widely expected by analysts -- after a loss of 1.43 dollars a year earlier.
In view of the company's dire straits, New York-based credit rating agency Standard and Poor's has warned the Atlanta-based airline its was facing an imminent decision on bankruptcy.
"To avoid bankruptcy, Delta must quickly secure a concessionary agreement with its pilots and very likely must also complete a public bond exchange offer that was amended and extended October 14, 2004," the rating agency.
It was not immediately clear if Wednesday's tentative deal will be able to satisfy this requirement.
"We will not release any details until the MEC has completed its deliberations," Renkel said, referring to the union's Master Executive Council, its chief governing body.
But Delta has been making progress toward its goal in recent days.
On Tuesday, it succeeded in revising its contract with the Professional Airline Flight Control Association that represents Delta's 185 flight superintendents.
While no details have been released, the company called the deal "an important building block in Delta's transformation plan, as we work diligently to return our company to viability."
10/28/2004 03:11 GMT - AFP