Delta Pact With Pilots Wins Court Approval

A $280-million-a-year concession agreement between Delta Air Lines Inc. and its pilots was approved Wednesday by a U.S. Bankruptcy Court judge.

The decision rejected claims by the government’s pension insurer that it should receive the compensation the pilots were promised if their pension is terminated.

The decision came hours after pilots approved the deal. The agreement, which runs through 2009, will take effect today.

The deal, which replaces an interim pact agreed to in December, includes an initial 14% pay cut for pilots and assurances the pilots union won’t fight any company effort to terminate the pilots’ pension.

Judge Adlai Hardin signed the agreement during a hearing in White Plains, N.Y. Earlier in the day, pilots of the Atlanta-based airline, the nation’s third-largest, ratified the deal with a vote of 61% in favor.

The judge’s approval, the last hurdle in the process, came despite an objection filed by the federal pension insurer, which insisted that a $650-million note and $2.1-billion unsecured claim that Delta has promised the pilots should belong to the agency if the pilots’ pension is terminated as expected.

Hardin heard arguments from lawyers for both sides but determined in the end that the agreement was in the best interest of the airline.

The Pension Benefit Guaranty Corp. said afterward that it was reviewing its options.

Also Wednesday, Delta said in a Bankruptcy Court filing that it lost $27 million in April. Excluding reorganization items, it would have posted a profit of $22 million in the 30-day period. As of April 30, Delta had $2.5 billion of unrestricted cash. It has posted losses of more than $14.4 billion since January 2001.