By AOIFE WHITE
Associated Press
Posted June 2 2006, 4:40 PM EDT
PARIS -- Delta Air Lines Inc. will file a request to terminate its
pilots' defined benefit pension plan ``fairly soon,'' Chief Executive
Gerald Grinstein said in an interview Friday in which he also talked
about employee pay cuts, his future and whether a merger is a good idea.
Grinstein, in Paris for a meeting with other executives, told The
Associated Press that the Atlanta-based airline is in talks with the
United States' pension insurer about the pilots' pension.
Asked when the company planned to seek termination of the pension,
Grinstein said, ``It'll be probably fairly soon.''
He said the third-largest airline in the U.S. is keeping the pilots'
union informed about the discussions with the Pension Benefit Guaranty
Corp.
``We've got a judicial schedule to conform to,'' he said. ``All of
those are pieces in motion, but it'll be fairly soon.''
It was the first time a Delta executive has said for sure that the
airline plans to terminate the pilots' pension. In the past, the
company has said only that it would likely seek termination.
Grinstein also said that Delta has no plans to ask its pilots for a
third pay cut, and he dismissed the idea, at least for now, that the
bankrupt company could merge with another carrier.
Grinstein said the $280-million-a-year concessions agreement that
pilots and the bankruptcy court approved Wednesday gives the airline
the cost cuts it needs.
``I don't expect to go back to the pilots,'' Grinstein said. ``We have
all our people at the market rate. We are going to have to be more
efficient both in the way we operate the airline but also in what can
be recouped in revenue management, handling the network and
utilization of our equipment.''
The airline's chief financial officer, Edward Bastian, had been
noncommittal when asked in March by AP whether the company might seek
a third pay cut from pilots.
The concessions package approved this week, which included an initial
14 percent pay cut and assurances the pilots union won't fight any
company effort to terminate the pilots' pension, was the second the
pilots agreed to in two years. In 2004, the pilots gave up $1 billion
in annual concessions in a five-year deal.
Delta has said previously it expects to emerge from Chapter 11 in the
first half of next year. On Friday, Grinstein said Delta's goal is to
emerge as an independent standalone company. Mergers are not an
option, at least not now, he said.
``Mergers in our industry are very difficult. You'd be hard pressed to
name a lot of them that have worked in the long-term sense,''
Grinstein said.
He added, ``Merging work forces particularly when they have different
unions and getting the seniority straight in an industry that is so
affected by attitude, when your service quality is a derivative of
attitude _ it can give you a pause, and in this market place you don't
need a pause.''
Asked about his future at the airline, Grinstein said he'll ``stay
until at least we know we're coming out'' of bankruptcy. He wasn't
more specific.
He said Delta fought long and hard to avoid filing for bankruptcy
protection last September, saying it was a very difficult ``extremely
costly'' process that had drained time and energy when the airline
needed to turn itself around.
``Obviously I didn't want to file Chapter 11,'' he said. ``It's taken
more time than I'd like to have spent doing it ... It's a diversion.
You'd like to be doing or thinking about different things and you have
to spend a significant part of your energy on that.''
If there was a silver lining to bankruptcy, it was putting in place a
team of people that were capable of running the airline, he said.
Grinstein was upbeat about the airline's prospects, saying Delta had
managed to wrestle revenue costs plus the soaring cost of oil and
still post a profit in April.
``I think that we've made remarkable progress,'' he said.
``In the light of fuel at the levels that it's at, the company was
still profitable in April. When the final numbers are out I think
you'll see a remarkable change in where Delta is in relation to the
rest of the industry,'' he said.
In approving the pilot concessions deal Wednesday, a U.S. Bankruptcy
Court judge rejected claims by the government's pension insurer that
it should receive the compensation the pilots were promised if their
pension is terminated.
If getting the pilot deal was a success, seeing a bankruptcy court
deny Delta subsidiary Comair's request to reject its contract with its
970 flight attendants was one of Delta's failures, Grinstein said.
Comair wanted to impose pay cuts the regional carrier says it needs to
stay in business.
``There have been some failures too,'' the Delta CEO said. ``We have
to recognize that. We have to go back into negotiations on that. I
hope we can work that out.''
On the Net:
Delta Air Lines Inc.: http://www.delta.com
Associated Press
Posted June 2 2006, 4:40 PM EDT
PARIS -- Delta Air Lines Inc. will file a request to terminate its
pilots' defined benefit pension plan ``fairly soon,'' Chief Executive
Gerald Grinstein said in an interview Friday in which he also talked
about employee pay cuts, his future and whether a merger is a good idea.
Grinstein, in Paris for a meeting with other executives, told The
Associated Press that the Atlanta-based airline is in talks with the
United States' pension insurer about the pilots' pension.
Asked when the company planned to seek termination of the pension,
Grinstein said, ``It'll be probably fairly soon.''
He said the third-largest airline in the U.S. is keeping the pilots'
union informed about the discussions with the Pension Benefit Guaranty
Corp.
``We've got a judicial schedule to conform to,'' he said. ``All of
those are pieces in motion, but it'll be fairly soon.''
It was the first time a Delta executive has said for sure that the
airline plans to terminate the pilots' pension. In the past, the
company has said only that it would likely seek termination.
Grinstein also said that Delta has no plans to ask its pilots for a
third pay cut, and he dismissed the idea, at least for now, that the
bankrupt company could merge with another carrier.
Grinstein said the $280-million-a-year concessions agreement that
pilots and the bankruptcy court approved Wednesday gives the airline
the cost cuts it needs.
``I don't expect to go back to the pilots,'' Grinstein said. ``We have
all our people at the market rate. We are going to have to be more
efficient both in the way we operate the airline but also in what can
be recouped in revenue management, handling the network and
utilization of our equipment.''
The airline's chief financial officer, Edward Bastian, had been
noncommittal when asked in March by AP whether the company might seek
a third pay cut from pilots.
The concessions package approved this week, which included an initial
14 percent pay cut and assurances the pilots union won't fight any
company effort to terminate the pilots' pension, was the second the
pilots agreed to in two years. In 2004, the pilots gave up $1 billion
in annual concessions in a five-year deal.
Delta has said previously it expects to emerge from Chapter 11 in the
first half of next year. On Friday, Grinstein said Delta's goal is to
emerge as an independent standalone company. Mergers are not an
option, at least not now, he said.
``Mergers in our industry are very difficult. You'd be hard pressed to
name a lot of them that have worked in the long-term sense,''
Grinstein said.
He added, ``Merging work forces particularly when they have different
unions and getting the seniority straight in an industry that is so
affected by attitude, when your service quality is a derivative of
attitude _ it can give you a pause, and in this market place you don't
need a pause.''
Asked about his future at the airline, Grinstein said he'll ``stay
until at least we know we're coming out'' of bankruptcy. He wasn't
more specific.
He said Delta fought long and hard to avoid filing for bankruptcy
protection last September, saying it was a very difficult ``extremely
costly'' process that had drained time and energy when the airline
needed to turn itself around.
``Obviously I didn't want to file Chapter 11,'' he said. ``It's taken
more time than I'd like to have spent doing it ... It's a diversion.
You'd like to be doing or thinking about different things and you have
to spend a significant part of your energy on that.''
If there was a silver lining to bankruptcy, it was putting in place a
team of people that were capable of running the airline, he said.
Grinstein was upbeat about the airline's prospects, saying Delta had
managed to wrestle revenue costs plus the soaring cost of oil and
still post a profit in April.
``I think that we've made remarkable progress,'' he said.
``In the light of fuel at the levels that it's at, the company was
still profitable in April. When the final numbers are out I think
you'll see a remarkable change in where Delta is in relation to the
rest of the industry,'' he said.
In approving the pilot concessions deal Wednesday, a U.S. Bankruptcy
Court judge rejected claims by the government's pension insurer that
it should receive the compensation the pilots were promised if their
pension is terminated.
If getting the pilot deal was a success, seeing a bankruptcy court
deny Delta subsidiary Comair's request to reject its contract with its
970 flight attendants was one of Delta's failures, Grinstein said.
Comair wanted to impose pay cuts the regional carrier says it needs to
stay in business.
``There have been some failures too,'' the Delta CEO said. ``We have
to recognize that. We have to go back into negotiations on that. I
hope we can work that out.''
On the Net:
Delta Air Lines Inc.: http://www.delta.com
