Delta pilots back changes in contract

Associated Press

May 15, 2008

ATLANTA - Delta Air Lines Inc. pilots voted overwhelmingly in favor of changes to their contract that will give them pay raises, an equity stake and other benefits, but also will give management more leeway as part of a proposed combination with Northwest Airlines Corp.

Voting, which started May 1, ended yesterday. A letter from the chairman of the union's executive committee, Lee Moak, to fellow pilots said 78 percent of pilots who voted approved of the changes.

The contract covers more than 7,000 pilots at Atlanta-based Delta. Northwest's 5,000 pilots are not part of the agreement.

Out of 6,073 eligible Delta pilots, 4,590 cast their vote. Of those, 3,580 voted in favor of ratifying the agreement, Moak said.

Delta agreed to extend its existing collective bargaining agreement with its pilots through the end of 2012. The revised contract provides the Delta pilots a 3.5 percent equity stake in the new company.

In exchange, the company will be able to place the Delta code and brand on Northwest flights and retain Northwest's large stake in Midwest Airlines, while maintaining those two carriers' separate operational status. The scope clause of the Delta pilot contract could have prevented Delta from doing those things had it not been amended as part of the agreement that has now been ratified.

Moak said the contract agreement will become effective when the combination of Delta and Northwest closes, unless the agreement is superseded by a joint collective bargaining agreement between Delta management and the pilots of Delta and Northwest.

Delta chief executive Richard Anderson said in a statement that the agreement marks "an important step towards combining our two great airlines."

Delta announced April 14 that it had agreed to acquire Northwest in a stock-swap deal that would create the world's largest carrier. The deal, which calls for the combined carrier to be called Delta and to be based in Atlanta, is subject to approval by shareholders and regulators. Delta pilots have been granted a voting seat on the board of the combined company.

Union leaders from Delta and Eagan, Minn.-based Northwest hope to work out an agreement on a merged contract and an integrated seniority list. They could not agree on the seniority issue before the combination was announced.