Delta's pilots union said Tuesday it has agreed with management's proposal to hold off on receiving a 2 percent pay hike, which will save the carrier $26 million a year.
The pilots, who were due to begin receiving the pay increase on Monday, said their approval of the proposal was conditioned on management accepting one of two options, with the preferred choice being using the funds saved to boost operations in low-fare markets and recalling 36 furloughed pilots.The pilots' second option would be to wait until Aug. 1, 1995, to receive the pay boost.
The move by the pilots union comes three months after Delta announced it will cut between 12,000 and 15,000 jobs over the next three years as part of a program to return it to profitability and lower annual costs by $2 billion.
The nation's No. 3 carrier has been hit hard by problems in its European markets and domestic competition from low-cost carriers such as Southwest Airlines and Continental. It announced late last year that it had been considering forming a separate low-cost carrier, but then said in late April it was not forming such an operation at this time.
The pilots said their plan calls for using the $26 million to underwrite all direct operating costs of three additional Boeing 737s. The planes would be used to compete with whatever low-cost carrier and routes Delta management selects.
The additional 36 pilots would be needed because of the flying time created by the three 737s, the union said.
"We recognize the significance of the short-haul problem and believe this interim solution is a step in the right direction and one that provides a benefit for both sides," said Bill Brown, chairman of the Master Executive Council for the Delta pilots' union.
"Growth, revenue enhancement and imaginative thinking will be the key to the long-term bargaining process and its successful outcome."
The 33-member council also unanimously recommended that the Delta pilots participate in the company's restructuring plan.