Delta Pilots Ratify Interim Agreement
ATLANTA, Dec. 28, 2005 – Delta Air Lines confirmed that its pilots ratified an interim agreement today that provides for a 14 percent hourly wage reduction and reductions in other pilot pay and cost items equivalent to approximately an additional 1 percent in pilot pay. The interim agreement will result in pilot cost reductions of approximately $143 million on an annualized basis. The agreement, crafted earlier this month by the company and the Air Line Pilots Association, International (ALPA), the collective bargaining representative of the company’s more than 6,000 pilots, is effective as of Dec. 15, 2005, and will remain in effect while the parties seek to reach a comprehensive agreement.
“Given the critical nature of our financial situation, this provides much needed financial relief while we seek to reach a comprehensive agreement with ALPA,” said the company’s chief executive officer, Gerald Grinstein. “We greatly appreciate the additional sacrifices Delta employees – including our pilots – are making to help save the company. Working together, everyone’s efforts are contributing to the operational progress and network improvements being made under the company’s transformation plan.”
Under the terms of the interim agreement, the company and ALPA have pledged to commit their full resources to negotiate a tentative comprehensive agreement by March 1, 2006, with pilot membership ratification by March 22, 2006.
In the event a tentative comprehensive agreement is not reached by the March 2006 time limits, Delta and ALPA have agreed to submit the section 1113 issue to a mutually agreed upon, neutral panel of three experts in airline labor matters for a binding decision on that issue.
“It remains our strong preference to reach a consensual agreement that is equitable and that helps Delta realize the cost reductions that will enable it to survive and to successfully restructure,” Grinstein said. “I believe these are not mutually exclusive goals and, in the best interest of the company and everyone concerned, we will proceed in good faith in an attempt to realize them.”
Delta has said that achieving additional annual pilot labor cost reductions is an important element of its restructuring plan. The restructuring plan calls for an additional $3 billion in annual cost reductions and revenue improvements to be realized by the end of 2007. The $3 billion improvement target is in addition to the approximately $5 billion in annual financial benefits the company says it is on track to deliver by the end of 2006, as compared to 2002.
Delta Air Lines (Other OTC: DALRQ) is the world’s second-largest airline in terms of passengers carried, offering daily flights to 505 destinations in 93 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. In summer 2006, Delta will be the world’s leading carrier across the Atlantic as it launches flights to 11 new European destinations from its Atlanta and New York-JFK hubs. Delta also is a major carrier to Mexico, South and Central America and the Caribbean, with more than 35 routes announced, added or applied to serve since Jan. 1, 2005. Delta’s marketing alliances also allow customers to earn and redeem SkyMiles on more than 14,000 flights offered by SkyTeam and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Customers can check in for flights, print boarding passes and check flight status at delta.com.
Statements in this news release that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the estimates, expectations, beliefs, intentions, projections and strategies reflected in or suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to, the actions and decisions of our creditors and other third parties with interests in our Chapter 11 proceedings; our ability to obtain court approval with respect to motions in the Chapter 11 proceedings prosecuted from time to time; our ability to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 proceedings and to consummate all of the transactions contemplated by one or more such plans of reorganization or upon which consummation of such plans may be conditioned; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for us to propose and confirm one or more plans of reorganization, to appoint a Chapter 11 trustee or to convert the cases to Chapter 7 cases; our ability to obtain and maintain normal terms with vendors and service providers; our ability to maintain contracts that are critical to our operations; our ability to maintain adequate liquidity to fund and execute our business plan during the Chapter 11 proceedings and in the context of a plan of reorganization and thereafter; our ability to comply with financial covenants in our financing agreements; our ability to implement our expanded transformation plan successfully; the cost of aircraft fuel; labor issues; pension plan funding obligations; interruptions or disruptions in service at one of our hub airports; our increasing dependence on technology in our operations; our ability to retain management and key employees; restructurings by competitors; the effects of terrorist attacks; and competitive conditions in the airline industry. Additional information concerning risks and uncertainties that could cause differences between actual results and forward-looking statements is contained in Delta’s Securities and Exchange Commission filings, including its Form 10-Q, filed with the Commission on November 14, 2005. The risks and uncertainties and the terms of any reorganization plan ultimately confirmed can affect the value of our various pre-petition liabilities, common stock and/or other securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. A plan of reorganization could result in holders of our liabilities and/or securities receiving no value for their interests. Because of such possibilities, the value of these liabilities and/or securities is highly speculative. Accordingly, we urge that caution be exercised with respect to existing and future investments in any of these liabilities and/or securities. Investors and other interested parties can obtain information about Delta’s Chapter 11 filing on the Internet at delta.com/restructure. Court filings and claims information are available at deltadocket.com. Caution should be taken not to place undue reliance on Delta’s forward-looking statements, which represent Delta’s views only as of December 28, 2005, and which Delta has no current intention to update.
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- Senior Manager - Media Relations
- Delta Air Lines Inc.
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