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Delta pilots make case at arbitration hearing

/ Source: The Associated Press

The pilots union of Delta Air Lines Inc. sought to show Friday that flying a commercial plane with the lives of hundreds of passengers at stake is a stressful, time-consuming and heavily regulated job that requires a lot of training and professionalism and — ultimately — good pay.

Union lawyers called several retired and current Delta pilots to testify before an arbitration panel that will decide whether to allow the nation’s third-largest carrier to void its pilot contract and impose up to $325 million in long-term pay and benefit cuts. The union says it will strike if its contract is thrown out.

One of the retired pilots, Kim Welch, said he didn’t take a certain prescription cholesterol medication because federal regulations could have prevented him from flying. He said he took a nonprescription medication instead.

“That is very typical for an airline pilot,” Welch told the panel.

Another retired Delta pilot, Dennis Dolan, testified about his two tours in Vietnam as a Marine fighter pilot and how they shaped his ability to focus on the task at hand.

In a statement, Atlanta-based Delta said its pilots’ commitment to their work isn’t the issue, but rather what the company needs to keep running.

“For Delta to successfully restructure and become a viable company, all of its costs need to be competitive, including its pilot labor costs, which are today among the highest in the industry,” the airline said.

But Welch also testified that when the union agreed to a bankruptcy protection letter and gave up $1 billion in annual concessions in 2004, the union understood that if Delta filed for Chapter 11 and wanted to reject its contract and seek more concessions it would first have to meet a specific financial test.

Even if it met that test, Delta would then only be able to seek an amount of concessions necessary to overcome a financial shortfall, Welch said.

“They did not have open-ended access to our contract,” Welch — a former union official — said he advised pilots in 2004.

Delta has argued that its pilots union is mischaracterizing what the bankruptcy protection letter means. The company argues that the letter allows it to seek a long-term remedy to its financial problems.

The company says the average earnings of pilots last year who worked the full year was more than $157,000. The union says line pilots made on average $151,000 last year. Both the union figure and company figure exclude management pilots, though the union figure also excludes instructor pilots and certain other pilots.

Delta filed for Chapter 11 bankruptcy protection from its creditors in September 2005.

The pilots have offered a second round of long-term cuts, but disagree on the amount Delta says it needs. The pilots believe they should receive some credit for the savings they say the company will reap if it terminates the pilots’ defined benefit pension plan.

In the latest negotiating proposals, the company has agreed to reduce its request to $305 million in cuts annually, while the union said it is offering $140 million annually.

On Thursday, Delta’s chief financial officer, Edward Bastian, said in an interview the airline won’t budge on its latest concessions offer, but would be willing to discuss pilot pension concerns.

The airline had asked the bankruptcy court in November to void the pilot contract. Shortly before a judge was set to issue a decision, the company and its pilots reached a deal on interim pay cuts.

That deal, equal to a little less than half of what the company is seeking on an annual basis, would be replaced by the long-term deal the two sides have been negotiating since December. They missed a March 1 deadline to settle on their own, sending the matter to arbitration.

A second week of hearings in Washington will occur next week.