The Associated Press reports that the latest deal includes around $280 million in average annual concessions. Delta had originally asked for $325 million in annual concessions.
The new deal cuts pilots’ hourly wages by 14% effective June 1, but hourly rates will be increased 1.5% on January 1, 2007 and increased further in later years, according to the AP.
The agreement also includes assurances that the union will not block company efforts to terminate the pension plan. Union leaders ratified the agreement and it will be sent to member pilots for a vote in the last half of May, the AP reports. If the union approves, it will be sent to a bankruptcy court for approval.
In addition, the deal includes the equivalent of an interest-bearing note of $650 million with a 15-year term. Previously the company had offered a $330 million note, while the union had been seeking a $1 billion note.
Delta had been seeking to void its contract with the pilots so it could impose the full cuts it was seeking (See Delta Wants Union Contract Voided: Pilots Ask Judge to Step Down ). That decision is on hold pending the approval of the new deal. Delta said the new deal is enough to allow it to successfully reorganize in bankruptcy.