Delta, Northwest Fail to Reach Pilots Deal

Two of the nation’s largest airlines, Delta Air Lines Inc. and Northwest Airlines Corp., failed to reach new contract terms with their pilots Wednesday after marathon negotiations.

Without a deal, Northwest’s pilots waited for a judge to rule on whether that carrier could throw out their union contract and impose its own terms.

In Delta’s case, arbitrators will decide that issue after a hearing scheduled to begin March 13.

Northwest did reach a tentative agreement with flight attendants Wednesday, the day a U.S. Bankruptcy Court in New York had set as a deadline.

The same judge, Allan Gropper, could rule at any time on Northwest’s request to reject its pilot contract. It wasn’t clear when that would happen.

Delta and Northwest, the nation’s third- and fourth-largest airlines, have said they need long-term pay cuts so they can emerge from bankruptcy protection. Both filed for Chapter 11 protection in New York on Sept. 14.

Attorneys were set to meet with the judge Wednesday night in New York, said Wade Blaufuss, a spokesman for the Northwest branch of the Air Line Pilots Assn.

Blaufuss said the union didn’t believe the law gave Northwest, absent a ruling, the right to impose its terms on pilots.

But some experts disagreed. Minneapolis bankruptcy attorney George Singer said he believed Northwest could impose its terms after Wednesday if the judge didn’t rule. But he said it wouldn’t be productive.

“That would strike me as something that wouldn’t foster ongoing negotiations,” he said. “I don’t see as a practical matter that it would play out that way.”

More than 92% of Northwest pilots voted to authorize a strike if the airline imposes its terms on them. Northwest said a strike would be illegal and that it would seek an immediate injunction to stop one.

Delta’s pilot union has threatened a strike too, though members have not voted on the issue.

A prolonged pilots’ strike could be enough to sink either airline. Atlanta-based Delta has described a strike as “murder-suicide.” Deadlines like those Wednesday have prompted wage-cut deals in other airline bankruptcy cases.

Delta said in a memo circulated among employees Wednesday that it offered to increase its pilots pay 1.5% at the end of 2008 and another 1.5% in 2009. Delta is now offering its pilots a $330-million note instead of $300 million if it terminates the pilots’ defined benefit pension plan. The pilots are asking for a $1-billion note.

Delta also said it has offered its pilots equity in the company once it emerges from bankruptcy protection.