updated 11/11/2004 5:25:34 PM ET 2004-11-11T22:25:34

Delta Air Lines pilots have agreed to slash their salaries by nearly a third and forgo pay raises for five years to help the struggling airline avoid bankruptcy, their union announced Thursday.

The $1 billion in wage concessions from Delta’s 7,000 pilots is a huge victory for the Atlanta-based airline, which has lost more than $6 billion since early 2001.

The plan received 79 percent support from pilots who voted over 10 days by phone and over the Internet. Voting ended at noon Thursday.

The agreement, which becomes effective Dec. 1, was tentatively reached by union leaders and Delta after 15 months of negotiations.

“Our airline has been managed to the brink of bankruptcy and the Delta pilots had to decide between two bad choices,” said John Malone, chairman of the pilots union’s executive council. “They chose the lesser of two evils.”

Delta pilots are currently among the highest-paid in the nation with salaries averaging between $100,000 and $300,000 a year. In return for the 32.5 percent pay cut and lack of raises, the pilots get options to buy up to 15 percent of the company’s stock.

The agreement also includes a freeze on pilots’ retirement benefits, higher medical insurance premiums and changes to scheduling rules.

In an internal memo to pilots Thursday, Delta CEO Gerald Grinstein acknowledged the sacrifices they and other Delta employees had made. He said their efforts “represent a Herculean effort to control our own destiny — a feat that is often attempted but seldom attained in our industry.”

Malone said pilots “have bought Delta time” to restructure without declaring bankruptcy. “It is now up to management to successfully execute a viable business plan.”

Delta Air Lines Inc. has eliminated 16,000 jobs and cut the pay of other employees, including its executives, but has continued to lose money. Last month, the airline reported a $651 million loss in the third quarter.

Delta’s other major work groups, including flight attendants and gate and ticket agents, are not unionized.

Company officials said Delta needed the wage concessions to stay afloat, but warned they may not be enough to avoid bankruptcy.

Ray Neidl, an airline industry analyst with Calyon Securities Inc. in New York, said the deal was essential.

“It gives them a chance to fight another day,” Neidl said. “It’s what they needed to continue their restructuring for survival.”

Delta must convince holders of its $20.6 billion in debt to restructure the repayment terms for all the pieces of its transformation puzzle to fall into place.

“I think the rest of the pieces, between now and the end of the month, should start falling together,” Neidl said. “This was the web that holds it all together.”

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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