Delta, Pilots In Court Over Wages

Delta Airline pilots exits U.S. Bankruptcy Court, Wednesday, Nov. 16, 2005, in New York. Hearings continued Wednesday with the beleaguered airline seeking to slash $325 million from its collective bargaining agreement with its pilots. (AP Photo/ Louis Lanzano)
A federal bankruptcy judge in New York begins hearing witness testimony today in Delta Airlines' bid to void its contract with Delta's pilots' union so the beleaguered airline can impose deep wage and benefit cuts and avoid further financial erosion.

In a hearing that lasted into early evening Wednesday Delta attorney Jack Gallagher said the airline valued its pilots and tried to negotiate reductions, but ultimately failed.

Faced with rising fuel costs, Delta is seeking to slash $325 million from its collective bargaining agreement with its pilots, saying the money is needed to keep its operations running. The ALPA, which has offered $90.7 million in concessions, has threatened to strike if the court grants Delta's request.

"The need is $325 million of cash. That is what our investment bankers tell us. That's what our creditor committee tells us," Gallagher said. "ALPA is fervently urging the court to say it isn't so. We're telling them it is so. We wish we didn't need $325 million of cash. But the need is real."

With several uniformed Delta pilots looking on in the standing room-only courtroom, union attorney Bruce Simon said the ALPA attempted to come to an agreement on further cuts, including an offer of short-term cuts with the possibility of deeper cuts under binding arbitration, but he said the pilots were rebuffed. He also noted the union agreed to $1 billion in concessions last year, and had given back enough.

"The fact of the matter is in that labor negotiations, both sides understand that labor strife is counterproductive," Simon said. "Pilots don't strike for the hell of it. They don't needlessly place their employer in dire jeopardy."

U.S. Bankruptcy Court Judge Prudence Carter Beatty actively questioned both attorneys, but singled out Delta for attempting to draw comparisons to other airline bankruptcies, which she said were useless in considering Delta's unique case.

"I say you're throwing darts at the pilots because they're smaller than you are and you think you can stomp on them. That may or may not be true," Beatty told Gallagher. "I don't think this matter will be resolved until I hear what the pilots have to say and what you have to say."