Pay isn't why 2 stay at Delta

ATLANTA --Poor pay, long hours, and the contempt of many employees and customers - that pretty much sums up the job of running an airline these days.

The only thing worse, for the management masochists who seek these positions, is living in daily fear that the job might be taken away.


That's the life of Edward H. Bastian and James M. Whitehurst, the two executives running Delta Air Lines on a day-to-day basis. They both want to become Delta's next chief executive, if the airline is not gobbled up in a hostile takeover.

Delta filed a reorganization plan yesterday that calls for it to emerge from bankruptcy protection in the spring as a stand-alone company worth as much as $12 billion, or slightly more than the combined market value of the nation's two biggest carriers.


The nation's No. 3 airline also said its board has formally rejected US Airways' $8.5 billion hostile takeover bid as its executives joined rank-and-file employees in a full-scale public relations assault against the merger proposal.

Delta's argument to remain independent also makes the case, by extension, for Bastian and Whitehurst to keep their jobs - and for one of them, perhaps, to become chief executive.

Their resentment of US Airways' offer - Delta Chairman and CEO Gerald Grinstein called the hostile bidder "the worst of all potential merger partners" - is more intense because of the sacrifices they and their 50,000 co-workers made to stay at Delta.

Bastian and Whitehurst gave up well-paying jobs outside the industry to join Delta when it already was clear that the airline was in trouble. Each is paid $382,500 a year, a fraction of what they could earn elsewhere.

"The rewards of this job have clearly not been financial," said Bastian, 49, who is chief financial officer.

He joined Delta in 1998 from PepsiCo Inc., was passed over twice for the airline's chief financial job, left in a mild huff last year, and then was back less than two months later when the job he had wanted suddenly came open.

"Can you explain it to me?" Bastian's wife, Anna, asked during an interview. "After two days of saying, 'What are you doing?' I knew he needed to do this. It was a calling."

"He would love to be CEO," Anna Bastian added. "He won't tell you that." She worries, though, that even if Delta rebuffs the US Airways offer, "then there will be the threat of the next one."


The appeal for Whitehurst, 39, Delta's chief operating officer? "It's a mess, which is what makes it fascinating," he said.

Whitehurst joined the airline in 2001 from Boston Consulting Group, where he had just been promoted to the equivalent of partner, a position that currently pays about $1 million to $1.5 million a year.

"Over time, he fell in love with the industry," said Whitehurst's wife, Lauren, who is also a Boston Consulting Group consultant. "It's an awful business. There are other jobs that would pay more."

Of the chief's job, Lauren Whitehurst said, "If it's not Jim - I've known him for 15 years - he lands on his feet. But it would be an emotional disappointment. It's a bit of an addiction."

And a costly addiction at that. Though $382,500 is a nice living, Bastian and Whitehurst could be making up to 10 times that amount in another industry, where regular profits beget bonuses and not being in bankruptcy begets stock options and grants, said Peter Crist, chairman of Crist Associates, an executive recruiting firm in Hinsdale, Ill.

"It's freakish," said Crist, who has recruited other airline executives away to better-paying jobs, but never easily. "They find this industry very compelling."


To be sure, the Delta executives could make a bundle if the carrier remains independent and emerges from bankruptcy, handing a big chunk of its stock to management. At United Airlines, Glenn F. Tilton, chief of parent UAL Corp., received a package valued at $40 million or more after running the company through three years in bankruptcy.

Delta executives would get one year's salary in severance in a sale of the company, spokeswoman Betsy Talton said. But Whitehurst and Grinstein would not get severance. (Bastian, who returned just before the bankruptcy filing, would get severance.) Unsecured creditors, whose claims will convert into new Delta common stock, will vote in bankruptcy court and decide the airline's future.

Like Grinstein, neither Bastian nor Whitehurst favors a US Airways takeover.

Delta in recent years has collected less in revenue per passenger than other big airlines - about 86 percent of the industry average as of late last year. More recently, because it is flying more international routes and using smaller planes domestically, such revenue has been above 90 percent and Delta hopes to reach the industry average next year.

"There's just a ton of momentum," Whitehurst said.

Bastian has been anxious for Delta's board to formally reject the US Airways offer so he can vigorously criticize it publicly.


"I look forward to the lawyers taking off the handcuffs," he said. Delta and US Airways compete in many markets and Bastian suspects a slimmed-down Delta worries US Airways' chief executive, W. Douglas Parker. "He looks around and everywhere he sees Delta - bigger, stronger."

Suppose Delta prevails and remains independent and, as Grinstein has said he would like to do, looks inside Delta's headquarters in Atlanta for the next chief. Could Bastian and Whitehurst work for each other?

"Whether it be Jim, me, or someone else, I'd be fine with that," Bastian said. "I came back here to be CFO. I'm flattered my name has been thrown into the ring."

Whitehurst said, "I'd very much like to be CEO." Asked later if he would work for Bastian, Whitehurst would not answer.

But an old friend from Boston Consulting, Hal Sirkin, doubts that Whitehurst, a native Georgian, would leave Delta now. "Jim feels like he's come home," Sirkin said. "I think he'd have a bias toward staying. Some boys just grew up fascinated by planes."