Delta soaring higher-striking accord with pilots

Delta airlines for sure seem to be blessed on the Easter eve. US' third-largest carrier and 77-year-old veteran airline on Friday avoided a possible strike for now by reaching a tentative deal with negotiators for its pilots union on permanent pay cuts.

The carrier, which is already operating in bankruptcy with losses worth $ 10bn over six years out of business had earlier asked for $ 305 million in annual pay cuts

In 2004, Delta pilots agreed to a five-year deal calling for $ 1 billion in annual concessions, including a 32.5% wage cut. But fuel costs have doubled since then, and Delta said it needed more cuts as it faces intense competition from discount airlines such as Southwest Airlines Co. and Jet Blue Airways Corp. Delta pilots are working under an interim contract signed in December that trimmed wages an additional 14%.Delta's management called for an additional 18% cut in pilots' pay and benefit concessions worth $ 305 million annually as part of an effort to cut $ 1.9 billion in yearly costs against which the union had offered 0 million.

The union had earlier threatened to strike if Delta operating under bankruptcy threw out its current contract. The uncertainty for sure gave a hard blow to bookings for Delta whose mainline carrier operates 1,722 daily flights and had more than 118 million passengers last year causing many passengers to fall for other travel arrangements for a busy holiday weekend and hurt. A statement from the company on Friday however asserted that customers can now book future flights with confidence. The carrier’s clientele too greeted news of a tentative labor agreement with joy and relief.

The pilots have mixed feelings about the job senior executives have done since the company filed for bankruptcy in September, and ratification of the agreement isn't a lock. Thus putting to work the proposed to Delta's 5,930 pilots is still a significant hurdle baulking the firm’ way. Union leaders will meet next week in New Orleans to discuss the deal and decide whether to recommend it to the bankrupt company's pilots, who then might take as long as a month to vote yes or no.

As said by said Michael Dunn, a Salt Lake City pilot for Delta, "I was relieved when I heard the word because I feared, like most other pilots feared, that there was a chance that the arbitration panel would rule in favor of the company and we would be forced to make good [on] our threat of a strike. And I didn't like thinking about the potential outcome of that strike scenario," The airline authorities backing on the move is hoping to emerge from bankruptcy next year.

The market analysts however hold a different perspective in the scenario. As stated by Philip Baggaley, an airline analyst at Standard & Poor's in New York, "A concessionary pilot contract that falls well short of what management had sought could cause friction between the pilots and other employees, and make it more difficult for Delta to attract financing to exit bankruptcy. In addition, such an outcome would encourage other employee groups to join unions to improve their bargaining position in future contract talks."