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Delta Air Lines agrees to mediation

But pilots haven't approved arbitration in contract dispute

Delta Air Lines said Thursday it has accepted an offer by federal mediators to arbitrate the 18-month-old contract dispute between the airline and its pilots — an action that would require both sides to accept the mediators' decisions and avoid a strike that would be crippling to Utah air travelers.

The pilots, represented by the Delta unit of the Air Line Pilots Association, said they would convene their Master Executive Council March 29 in Atlanta before deciding to accept or reject the arbitration deal.

Delta operates a major hub at Salt Lake City International Airport that accounts for a majority of the local flights.

Atlanta-based Delta immediately said it would accept binding arbitration by the National Mediation Board (NMB) in Washington, D.C., on all of the remaining issues yet to be resolved in the rancorous negotiations that have been going on since September 1999.

The mediation board did not release the airline or its pilots to a so-called "cooling-off" period, after which the pilots could legally walk out, and Delta said its operations are continuing as scheduled.

"Delta is accepting arbitration because we believe it is in the best interest of the traveling public," said Robert Colman, executive vice president of human resources for Delta, the nation's third largest carrier and by far the largest carrier at Salt Lake City International Airport.

"Our offer recognizes the valuable contribution that Delta pilots continue to make to our business. ALPA's acceptance of arbitration would allow us to promptly resolve our differences without the potential of a service disruption."

The pilots' union see it differently.

"We are extremely disappointed that after nearly 19 months of direct negotiations, including nearly four months under the guidance of the NMB, no agreement has been reached with Delta management," said Charles S. Giambusso, chairman of the Master Executive Council, which represents Delta's 10,000 pilots.

"We realize the failure to reach an agreement thus far continues to create frustration and potential travel disruption, and this further adds to our disappointment in management's refusal to negotiate on the vital issues of job security, retirement, compensation and the two-tier wage structure in place at Delta Express."

But that veiled threat of "potential travel disruption" — the pilots have already authorized a strike — if negotiations fail is being played down by most industry analysts who say it's in the best interests of both sides to iron out a settlement as the airline industry heads toward the busy summer travel season. And even if they don't, most expect President Bush would step in to stop a walkout that would harm the already crippled national economy.

The pilots claim that for two years Delta has said it would offer them an industry-leading contract. "If Delta simply honors that commitment, then we can achieve a contract that satisfies the needs of both parties," Giambusso said in a statement issued Friday.

Earlier this month Delta offered the pilots a contract that would boost their pay 25 percent this year and 35 percent by the fourth year of a new contract, pushing its pilot costs from the current $1.83 billion for the fourth year to $2.47 billion under the new proposal.

Last week, Delta said it expects to report a net loss of $85 million to $110 million in the first quarter of 2001 rather than the net profit that analysts has been expecting. The announcement indicates that business travel is waning in the wake of the national economic slowdown and the bear market in stocks, as well as flight cutbacks that Delta attributes to the refusal of pilots to work overtime shifts.