Showdown looms at Delta
Pilots say they could be on strike after holiday weekend if ruling on labor pact goes against them; management vows to fight to keep pilots on the job.
By Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) - Delta Air Lines and its pilots union could soon be flying into uncharted legal territory that could determine if the pilots go on strike and whether the nation's No. 2 air carrier stays in business.

Both the Air Line Pilots Association and Delta management say they hope to reach an agreement on a new labor deal in talks set for this week. And most airline analysts still think it's unlikely the situation will escalate to the point of a strike and shut down of the airline, which flies more than 300,000 passenger a day on about 1,700 daily flights.

Pilots at Delta Air Lines, shown here on an informational picket line, could be on strike in a little more than a week, according to its union.
Pilots at Delta Air Lines, shown here on an informational picket line, could be on strike in a little more than a week, according to its union.
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But if talks fail to reach agreement, there is not much that's clear about what would happen next.

The union is arguing that if an arbitration panel weighing its contract with Delta rules against it in the next week, it intends to go on strike, even if it means the bankrupt airline must halt operations permanently. The only thing it won't say is when such a strike would start, only that it would be some time after April 17, or after the upcoming holiday weekend.

"We will strike when we determine it is prudent and advisable," said union spokeswoman Kelly Collins. She said notice of a strike could range from a few hours to 30 days. She wouldn't comment on the view that a strike would mean an end to Delta, and its 6,000 members six-figure jobs, other than to point to a union statement that, "We will not capitulate to these demands based on a fear of what may lie ahead. We understand the risks."

On the other side is Delta management, which argues that it needs the panel to give it the power to throw out the current labor deal with the pilots. But it says it hopes to keep negotiating to reach a new concession pact with the union, even if it is given that power. And it is arguing that even if the current labor deal is thrown out, a strike by the pilots union would be illegal under the Railway Labor Act, (RLA) the unique labor law that covers both railroads and airlines.

"We believe that a strike would not be legal until all the processes of the RLA are complete, that includes mediation and a 30-day cooling off period," said Delta spokesman Bruce Hicks. "If there's a strike, we would be ready to seek all appropriate legal remedies. A pilot strike that is not halted by the court would be fatal to Delta Air Lines."

Collins not only disputes management's contention that a strike would be illegal, she says the union believes it will be without a valid contract if the panel rules against the union.

"Our position is that if the panel upholds management's motion to reject the contract, it's like a court ruling a spouse's petition for a divorce," she said. "Once a court validates a divorce decree, you're divorced."

Amazingly enough, even with the long history of bankrupt airlines and railroads, there is no example a bankruptcy court voiding a labor agreement reached under the RLA. So whether a court or President Bush could order an immediate end to a pilots strike is not certain.

"How bankruptcy of a carrier impacts whether a union can legally strike under the terms of the Railway Labor Act is a matter for the courts," is the official statement of the National Mediation Board, which overseas that act which covers the two sectors.

The union and management agreed to let the panel, rather than the bankruptcy judge, decide whether the company could get out of the labor agreement, but they've agreed on very little publicly since then.

The panel's deadline is April 15, at the start of the holiday weekend. But it is not likely to announce a decision until after the holiday weekend.

Delta says the average pay for a Delta pilot was $157,000 last year, even after the members there took nearly a one-third pay cut in October 2004 in an unsuccessful effort to keep the airline out of bankruptcy court.

The union said much of that pay was due to extra hours of flying due to short staffing at the carrier, as well as the high pay of its most senior pilots.

"There are thousands of pilots who never get anywhere close to that," said ALPA's Collins.

The airline and union agreed to another 14 percent pay cut of its remaining pay package in December 2005, and management is seeking additional cuts that would raise that second concession to 18 percent.

But Collins said that even though the wage concession being sought by Delta at this time is only a fraction of what the union had already agreed to, other changes in work rules, scheduling and benefits make management's current demands unacceptable.

"Pay is just part of the contract," said Collins. "The work rule changes are egregious. The benefit changes are egregious."

For more on the strike vote by pilots at Delta, click hereTop of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.