Delta Pilots Begin Contract Vote

Delta Air Lines Inc.’s pilots started voting Monday on a union contract proposal that would cut their salaries nearly a third, while the company announced that it had secured an additional $500 million in financing to help the airline stave off a bankruptcy filing.

The proposed pilots’ agreement, reached by union leaders Wednesday after 15 months of negotiations, includes $1 billion in wage concessions by Delta pilots, who are among the highest paid in the nation with salaries averaging $100,000 to $300,000 a year.

Company executives say the concessions are necessary to keep the nation’s third-largest carrier afloat as it attempts to restructure its finances without having to file for bankruptcy.

The union’s 7,000 pilots began casting their ballots over the phone and Internet at noon Monday, and the voting will continue over the next 10 days, pilots’ union spokeswoman Karen Miller said. She said the results would not be tracked until the voting ended at noon Nov. 11. A simple majority vote is needed to ratify the tentative agreement.

As it awaited the pilots’ vote, Delta received a commitment from GE Commercial Finance for $500 million of financing.

Delta said $200 million of the financing would be in loans, to be repaid in 12 equal monthly installments, starting two years after it got the money. The remaining $300 million will be in the form of a credit line that will mature within three years.

Delta already has secured a commitment of as much as $600 million in financing from a unit of American Express Co. and an agreement to defer $135 million of its debt for two years. However, those deals are conditioned on Delta achieving all of its cost-cutting targets, including the pilots’ concessions.

“While there is a significant amount of work yet to be accomplished, these developments will make a meaningful contribution to the massive companywide effort underway to transform our airline,” Michael J. Palumbo, Delta’s executive vice president and chief financial officer, said in a statement Monday.

Delta has lost more than $6 billion since early 2001, during which time it has eliminated 16,000 jobs and cut the pay of other employees, including its executives. Delta plans to cut as many as 7,000 more jobs in the next 18 months. Last month, the airline reported a $651-million loss in the third quarter.

The pilots’ proposal calls for a 32.5% pay cut effective Dec. 1, and would provide no raises for the remainder of the five-year contract. Other pilots’ concessions include revisions in the pension plan and work rules. In return, pilots would get options to purchase as much as 15% of the company’s stock.

Even if the agreement is approved, company executives say a bankruptcy filing remains a possibility. Delta still has to persuade the holders of its $20.6 billion in debt to restructure the repayment terms for all of the pieces of its transformation puzzle to fall into place.

Delta shares rose 10 cents to $5.55 on the New York Stock Exchange.