Leaders of Delta Air Lines' pilots union voted Wednesday to approve a tentative Delta-Northwest pilot labor agreement.
Northwest Airlines' pilots union leadership will vote on the tentative agreement during a meeting Thursday and Friday. It also is subject to ratification by rank-and-file pilots at each airline. The vote was part of a continuing effort to resolve differences between the two airlines' pilot groups on seniority and pay parity.
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Those key issues halted negotiations between the pilots of Atlanta-based Delta and Eagan, Minn.-based Northwest in the weeks before the airlines' mid-April merger announcement.
Seniority determines a variety of factors, including which planes pilots qualify to fly. It also can affect pay.
Delta pilots worry their existing senior status could erode depending on how they combine with the Northwest pilots, who are older and more experienced, on average.
But the Delta pilots are better-paid than those at Northwest, and the Northwest pilots want to ensure their pay will be bumped to Delta's level.
The tentative agreement would bring Northwest's pilot pay to that level, said Lee Moak, chairman of Delta's master executive council.
"It's the same pay on Day One," said Moak, who plans to travel to Minnesota on Thursday to meet with Northwest pilot union leaders.
The tentative agreement also includes 4 percent to 5 percent pay raises from 2009 through 2012 and equity in the combined company for Delta and Northwest pilots.
On seniority integration, the pilot union leaders agreed to set up a process for reaching consensus. If the pilot unions do not reach agreement by a set deadline, then the details will be worked out through binding arbitration before the merger closes.
Delta's pilot union leaders voted unanimously for the tentative agreement, a longtime Delta pilot said.
"It is a great deal for Delta," the pilot said. "The Northwest pilots do indeed have pay parity, and that's what they wanted to hear coming out of this deal."
Delta pilots won't be taking a pay cut to bring Northwest pilots up to the same pay rate, the pilot said.
The pilot said both pilot groups lost equity in the proposed new airline by not agreeing to a deal before the merger was announced. Nevertheless, the pilot called the new agreement "an all-around good deal."
If ratified, the tentative agreement would clear a major hurdle toward the proposed merger by ensuring pilots from both airlines operate under the same contract in a merged company.
Pilot disputes have hobbled past airline mergers, notably the 2005 combination of US Airways and America West. Those pilots still work under separate contracts, hampering the merged airline's full operational integration.
"There's this perception that airline mergers don't work" because of labor issues, said Mike Campbell, Delta's executive vice president for human resources, labor and communications. "We wanted to change the paradigm" by reaching a pilots agreement before the deal closes.
The tentative joint contract is different from a labor agreement ratified by Delta's pilots in May, but it is based on that agreement, according to the Delta pilots union.
That agreement also included annual pay raises of 4 percent to 5 percent and a 3.5 percent equity stake for Delta pilots in the combined company.
The joint contract, if ratified, would become the pilot contract for the combined carrier.
The pilots agreement allows Delta management to speed up efficiencies in scheduling, operations and its combined fleet of aircraft, according to a report Wednesday from CreditSuisse analyst Daniel McKenzie.
Even if the Delta and Northwest pilots agree to a joint contract, the airlines have work to do to get their proposed deal done by the end of the year, as executives have forecast.
Regulators must give the OK. Delta and Northwest filed Tuesday for European Union regulatory approval of their proposed combination.
The merger also is being reviewed by the U.S. Department of Justice. On Wednesday, U.S. Sen. Herb Kohl (D-Wis.) issued a statement urging the Justice Department to "closely examine" the proposed merger's effects on Midwest Airlines, partially owned by Northwest and based in Oak Creek, Wis.
Shareholders also must approve the merger, which has lost about half its value since first announced April 14.
Delta's proposed all-stock purchase of Northwest fell to a value of $1.74 billion Wednesday. Delta shares closed up slightly at $5.31. Northwest gained 2.7 percent to close at $6.08.
The deal calls for each share of Northwest to be exchanged for 1.25 Delta shares.
-- Staff writer Rachel Tobin Ramos contributed to this article.
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Comments
By Emmett
Jun 26, 2008 9:47 PM | Link to this
Kevin,
Your basic premise is flawed in so many ways. Over the last few years, American pilots have suffered pay cuts of 23-40%. Have you seen fares go down? If U.S. pilots stopped paying taxes and spending their wages in the U.S. do you think that would be good for our country? Plus, Asia doesn't have ehough pilots now. Expat Americans are flying foreign planes all over the world. I know people resent anyone they think is doing better than they are, but pilots can demand a little more because we are harder to replace; and that's the bottom line. I'm sure that if you have a job, there is someone in a poor country that would be happy to replace you for less.
By Retired
Jun 26, 2008 5:47 PM | Link to this
The pilots will be taken care of by their unions. The Northwest ground workers and flight attendants are represented by unions. Delta ground employees and retirees have no representation. They are the ones getting the shaft. Delta had always been known as an Airline of their word. Their employees always believed this, made sacrifices, even bought a plane for Delta. What a hard, expensive lesson we have learned. C.E. Woolman is turning over in his grave(bless his soul) to see the Airline he made become a shell of his vision.
By tom
Jun 26, 2008 3:12 PM | Link to this
kevin- you think making flying free will mean that we get fantastic service?????? are u dumb???? southwest tries to be low, they offer nothing. you get nothing. they only have 1 airplane=low maintenance. they didn't have to have all the other things that the big carriers had because of deregulation. do your homework. don't ***** when you get peanuts. that's all you get on southwest.
By doug
Jun 26, 2008 2:43 PM | Link to this
KEVIN...YOU ARE AN IDIOT. ASIAN CARRIERS CHARGE WAY MORE THAN AMERICAN CARRIERS. THAT'S WHY THEIR SERVICE IS , AT TIMES, BETTER. YOU ARE DUMB...YOU NEED TO TAKE THE BUS.
By bill
Jun 26, 2008 2:35 PM | Link to this
great, pilots are going to get a bunch of money. i fly coach. i want my flight attendants and gate agents to be happy too..i want them to get a big raise..not the paultry one they are getting...they are the ones i want happy, not just pilots.
By Mark Jordan
Jun 25, 2008 11:17 PM | Link to this
Why are you so negative. If you don't feel comfortable with American pilots then don't fly american airlines..you do have a choice, exercise it. Flyguy, do you really believe what you wrote. Other employees will pay for the raises !! Et tu..you need to look at this as who is the lead company and where is the headquarter is going to be based. Now ask yourself which unit will be laying off. Stay honest and positive.
By Kevin
Jun 25, 2008 9:16 PM | Link to this
Hey we should let Thai Airways and other Asian airlines compete with the US carriers then maybe quality of service will go up and ticket prices go down.
GET RID OF AMERICAN PILOTS
By flyguy
Jun 25, 2008 8:15 PM | Link to this
Who cares about management. They'll be able to get jobs somewhere else. Besides, the non-union flight attendants, agents and ramp workers are going to pay for the pilot's raises.
By Et tu Brute
Jun 25, 2008 7:20 PM | Link to this
How many more Delta supervisory/administrative employees are going to be laid off to fund the DL/NW pilot deal?
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