Delta pilots vote for pay cuts

Delta pilots vote for pay cuts

Delta staff have the option to acquire shares in return for pay cuts
Pilots at Delta Air Lines have voted to accept pay cuts totalling more than $1bn (£540m) to stave off bankruptcy.
The pilots’ pay cut is a key part of Delta’s survival package, which involves cutting 6,900 jobs company-wide and issuing new shares to staff.

Delta’s pilots union said its members had approved a 32.5% pay cut, followed by a five year pay freeze by a majority of 79%.

Delta has argued that delays to the package could jeopardise its survival.

‘The lesser evil’

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

“They chose the lesser of two evils.”

Delta’s shares rose 6% on Thursday on the news that the airline’s pilots had accepted the deal, after a 10-day voting period.

The previous day, the New York Stock Exchange (NYSE) granted the airline a green light to issue new shares without first seeking shareholder approval.

Under Delta’s survival plan, the 75 million new shares will be issued to the airline’s 57,000 staff, and to creditors and suppliers in exchange for debt rollovers and price cuts.

Management at Delta, which lost $646m in the last three months, is aiming to slash a total of $5bn from its costs.

http://news.bbc.co.uk/1/hi/business/4005265.stm