WASHINGTON (AFP) - Pilots at struggling Delta Air Lines approved givebacks aimed at saving one billion dollars a year, the company and union said.
The pact was considered crucial to helping Atlanta, Georgia-based Delta avert bankruptcy.
Delta vowed to chop five billion dollars from annual operating expenses by 2006, and it says it is on track to lower costs by 2.3 billion this year.
"Our airline has been managed to the brink of bankruptcy and the Delta pilots had to decide between two bad choices," said John Malone, chairman of Delta's pilots union. "They chose the lesser of two evils."
Under the deal, Delta's pilots would take a 32.5 percent pay cut with no pay raises over five years.
The benefits plan for the Air Lines Pilots Association, as the union is known, will be canceled and replaced with a new plan. The deal also provides options to purchase 30 million shares in Delta, worth a 15 percent stake.
According to the union, the concessions were approved by 79 percent of its 6,756 pilots who are eligible to vote.
"It is now up to management to successfully execute a viable business plan," Malone said.
Delta chief executive Jerry Grinstein praised the decision by the pilots.
"Your contributions, coupled with the financial benefits realized from Delta people throughout the company, other stakeholders, and our own operational improvements, represent a Herculean effort to control our own destiny -- a feat that is often attempted but seldom attained in our industry," he wrote in a memo to the pilots.
Speculation that Delta would slide into bankruptcy this year has waned as the nation's third-largest airline has engineered a series of transactions over the past month to buy itself more time to fulfill its restructuring plan.
11/11/2004 - 22:42 GMT - AFP