Monday, December 12, 2005

Delta Cuts Deal With Pilots

Well, it looks like another 'Delta goes bye-bye' scenario has been averted. Late yesterday the pilots and management made a tentative deal worth more than $152 million a year in temporary pay cuts. The number is less than half of what Delta management wanted, and the pilots union is counting this one as a victory - after all, management did want them to give up $325 million a year in pay and benefits.

But the question remains: even though the pilots won this battle, who will win the war? Most people point to Delta. After all, most airlines in bankruptcy use the leverage of the court to get what they want - à la United in the past few years.

Yet at least for now, Delta's continuing to fly. And it's a good thing for everyone at Delta that the pilots agreed to cuts - because if they walked off the job like they were threatening to do, it would have been curtains for the entire outfit. Not that the pilot's union isn't threatening to strike, however. So while management - and everyone else - dodged a major bullet yesterday, don't think that Delta's problems are far from over.

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