Originally created 09/21/04

Delta nears deal on recall

ATLANTA - Delta Air Lines Inc.'s pilots union agreed Monday to allow the struggling carrier to recall retired pilots on a limited basis to help prevent the grounding of flights because of staff shortages.

The move came after the company agreed not to terminate the pilots' pension plan before February, even if the company files for bankruptcy in the meantime.

The tentative agreement must be ratified by the 7,500 active Delta pilots, which could take days. The nation's third-largest airline has warned that it would have to file for bankruptcy if it didn't stem a wave of early pilot retirements by the end of September.

The agreement still does not resolve Delta's larger problem: Getting the pilots to agree to $1 billion in concessions. The Atlanta-based airline also has warned of the possibility of a Chapter 11 filing without the concessions.

Delta fears its pilots could jump ship en masse because they are worried about their pensions amid United Airlines' threat to terminate its employee retirement plans. Hundreds of Delta pilots have retired early recently, and more have threatened to, chief executive Gerald Grinstein has said.

Delta pilots who retire can elect to receive 50 percent of their pension benefit in a lump sum and the rest as an annuity later, regulatory filings show.

According to Monday's tentative agreement, which was announced in a memo from the pilots union to its members, pilots eligible to be employed for a limited timeframe will have a retirement date of Oct. 1 or later.

Eligible pilots must be captain-qualified and current in certain models of aircraft. The agreement means management can access "post-retirement pilots" only if the manning is at or less than 110 percent of the number of regular lines in a captain position on one of the designated aircraft models.

The union said there will be a "random selection process" for the selection of post-retirement pilots. It said the agreement allows it to determine any time after January that no additional pilots can be employed as post-retirement pilots.

Existing post-retirement pilots could serve until Dec. 31, 2005, but only if they are serving in a position that would be staffed below the 110 percent level without them, the union said.

Post-retirement pilots will be able to collect their retirement benefits, the union said.

There was no immediate response from the company. Spokesman John Kennedy said earlier Monday that the company had no comment on the status of negotiations.


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