Judge, pilots approve Delta concessions deal


Published: Thursday, June 1, 2006 at 6:01 a.m.
Last Modified: Wednesday, May 31, 2006 at 11:27 p.m.
A bankruptcy judge Wednesday approved the $280-million-a-year concessions agreement between Delta Air Lines Inc. and its pilots, rejecting claims by the government's pension insurer that it should receive the compensation the pilots were promised if their pension is terminated.
The decision came hours after rank-and-file pilots gave their nod to the deal. The agreement, which runs through 2009, will take effect today.
The deal, which replaces an interim pact agreed to in December, includes an initial 14 percent pay cut for pilots and assurances the pilots union won't fight any company effort to terminate the pilots' pension.
Judge Adlai Hardin signed the agreement during a hearing in White Plains, N.Y. Earlier in the day, pilots of the Atlanta-based airline, the nation's No. 3 carrier, approved the deal with a vote of 61 percent in favor.
The judge's approval, the last hurdle in the process, came despite an objection filed by the government's pension insurer, which insisted a $650 million note and $2.1 billion unsecured claim Delta has promised the pilots should belong to the agency if the pilots' pension is terminated as expected.
Hardin heard arguments from lawyers for both sides, but determined in the end the agreement was in the best interest of the airline.
The Pension Benefit Guaranty Corp. said afterward it was reviewing its options.
"It was probably the most significant negotiation transaction we'll face as part of this bankruptcy process," Chief Financial Officer Edward Bastian said of the concessions deal. "It gives us the ability to put the past behind us and make Delta a success again."
The chairman of the pilot union's executive committee, Lee Moak, said in a statement that the agreement the pilots ratified "provides a framework for Delta to successfully reorganize and emerge from bankruptcy ready to win in today's competitive marketplace."
The cuts are in addition to $1 billion in annual concessions the pilots agreed to in a five-year deal in 2004.

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