Delta Agrees to Pact on Non-Pilot Retiree Benefits

October 5, 2006 ( - Certain retired Delta Air Lines employees will get reduced medical benefits under a new agreement between the bankrupt air carrier and a committee representing its non-pilot retirees.

According to an announcement released Thursday, reduced health care subsidies will be available to tens of thousands of employees who left Delta under early retirement programs and for retirees who are 65 and older.

The agreement also includes unspecified provisions “to reduce the hardship to individual retirees affected by the changes” and will give bankruptcy claims to those whose benefits are reduced, the announcement said.

The Associated Press reported that some retirees will go from paying no premiums for their health care coverage before reaching 65 to paying a portion of the cost of their coverage, court papers say. Others will go from paying 10% to 25% of the cost and others will go from paying 22% to 35% of the cost.

If approved by the Bankruptcy Court, the benefit changes will become effective January 1, 2007. The statement said the retiree committee is also working with Delta to try to provide a better value medical and prescription drug program for those 65 and older.

The changes are expected to help Delta save tens of millions of dollars in coming years as well as help with a successful bankruptcy reorganization.

“We worked hard together to maintain some of the most critical benefits for the retirees who built this airline,” said Cathy Cone, chair of the committee appointed by the bankruptcy court, in the statement, “while recognizing the critical need to cut cost to save the company they built.”

A Delta representative also applauded the deal. “Throughout this very difficult and regrettable process, we appreciated the retiree committee’s constructive work that recognized the very complex circumstances and the vastly different needs of Delta retirees and survivors,” said Rob Kight, Vice President of Compensation, Benefits and Services. “Together we created solutions which have addressed this situation sensitively and equitably within the range of what the company can now afford.”