Last month, Delta told pilots it wants to cut their hourly wages by 22%, cancel pay raises due over the next year and reduce some benefits. In addition to the pay cut for pilots, Delta wants to reduce the company contribution to a family savings plan for pilots to 2% from 3% and is proposing comprehensive negotiations focusing on work rules, benefits and further discussion on pay rates in the fall of 2004 or sooner, depending on the financial condition of the company.
The union’s issue with the move is the sacrifices employees have already made. “Labor did not create this problem, and the E&FA [economic and financial analysis] team does not endorse management’s specific proposal,” a union memo circulated to pilots said. “The team has concluded, however, that all stakeholders, including labor, need to be part of the solution,” the memo concluded, according to the Associated Press.
Instead, the union’s financial team linked Delta’s problems to a drop in revenue and new debts, not to what it pays its pilots. “Labor costs as a percentage of total expenses have been fairly flat,” the memo said. “Expenses have not changed very much. Although it appears there has been a recent spike in labor expenses relative to total revenue, the main cause of the relative percentage increase in labor expenses is the reduction in revenue, not the increase in expenses.”
The memo stopped short of calling for a rejection of the proposals as the union said it is still gathering input from 9,000 pilots it represents before deciding on a course of action.
Atlanta-based Delta has laid off 16,000 employees since the September 11 attacks and has also furloughed more than 1,000 pilots. Earlier this month, the company said it would furlough an additional 200 pilots this year because of a dropoff in travel due to the war in Iraq.