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Delta cleared to sell some airplanes

Managers, pilots union haggle over concessions

NEW YORK — A U.S. bankruptcy court judge on Tuesday approved Delta Air Lines Inc.'s request to sell some of its airplanes and to reject an Atlanta office lease.

Judge Prudence Carter Beatty said she would allow Delta to sell an undisclosed number of aircraft, including Boeing 737, Embraer 120, Boeing 767 models. It was not evident whether Delta already has a buyer for the aircraft or how much it might get for them. No details were disclosed on the office lease.

The ruling came as Delta management and its pilots union prepared to present their cases in a fourth day of hearings devoted to Delta's motion to reject their bargaining agreement, a move the airline it says it needs to successfully emerge from bankruptcy.

Atlanta-based Delta, which filed for Chapter 11 on Sept. 14, has about 50,000 employees of which some 6,000 are pilots. It is looking for $3 billion in annual cost savings overall.

Delta wants $325 million in concessions from the pilots, saying it needs to cut labor costs to make itself competitive with other carriers who operate at a lower cost.

The Air Line Pilots Association, the union representing the pilots, has offered $90.7 million in concessions and has threatened a strike if the court grants Delta's request. Delta maintains such a walkout would violate the Railway Labor Act.

On Monday, Delta chief financial officer Edward Bastian said the cuts were needed to keep the airline alive. Delta lost $2.6 billion in the first nine months of this year.

Asked if Delta had considered the possibility of a strike by its pilots, Bastian said Monday a strike "would be devastating."

If the court approves Delta's proposed cuts, they would be on top of $1 billion in annual concessions the pilots agreed to in a five-year deal reached in 2004. That deal included a 32.5 percent pay cut and has been held up by the union as a sign of their willingness to negotiate.