Delta, pilots union fight hostile takeoverDelta's management and its pilots union have mended fences in order to fight US Airways' unsolicited $8.9 billion offer.
BY HARRY R. WEBER
Associated Press
ATLANTA - Hostile takeovers make strange bedfellows. Case in point: Delta management and its pilots union.
The two sides were at each other's throats earlier this year over Delta's ultimately successful effort to wring a second round of hefty pay cuts from pilots and win approval to terminate their pension.
US Airways' unsolicited $8.9 billion offer to buy Delta has put management and the pilots union back on the same side. The union's support of Delta's stand-alone plan could give management a boost with the company's creditors committee in its bankruptcy case.
`A COMMON THREAT'
''We have a common threat from outside Delta Air Lines,'' the chairman of the pilots union's executive committee, Lee Moak said.
The union is concerned about further job and benefit cuts if US Airways buys the Atlanta-based company. It also is worried about routes being dropped, and it believes higher ticket prices will result from the deal.
Moak told fellow pilots in a memo Tuesday that ``should this merger be as misguided and as poor an idea as I currently believe it to be, then I will deploy every available resource to stop it.''
But can he?
''They do have a stake but probably not enough to block it,'' Ray Neidl, an airline analyst with Calyon Securities in New York, said of the pilots union.
But, Neidl added, ''You do want to have the cooperation of the employees'' if you are US Airways.
The Delta chapter of the Air Line Pilots Association has a seat on the nine-member creditors committee.
Moak said that the pilots union is in contact with other members of Delta's creditors committee. Delta, too, has been speaking to the committee.
Phil Gee, a spokesman for Tempe, Ariz.-based US Airways Group, said Wednesday his company is not surprised by the stance of the Delta pilots union.
MENDED FENCES
Delta's management and its pilots have come a long way in mending their differences.
Earlier this year, the union was threatening a strike over Delta's effort to reject the pilots contract and impose pay cuts.
In April, the two sides reached an agreement for $280 million in annual concessions, which was on top of $1 billion in annual concessions the pilots agreed to in a five-year deal in 2004. The pilots also agreed as part of the latest concessions deal not to fight Delta's effort to terminate their pension.
There was no strike. The pilots continued flying. Delta went back to restructuring its business as part of its plan to emerge from bankruptcy.
Then US Airways' takeover bid last week shook the street.
Moak says the union and Delta management can work well together now.
They may have to if they are going to beat back the US Airways offer, which has gained traction among some Wall Street investors.
''As far as the pilots are concerned, we're interested in a long-term viable carrier,'' Moak said. ``Right now, the Delta stand-alone plan provides that, and that's what we believe.''
BY HARRY R. WEBER
Associated Press
ATLANTA - Hostile takeovers make strange bedfellows. Case in point: Delta management and its pilots union.
The two sides were at each other's throats earlier this year over Delta's ultimately successful effort to wring a second round of hefty pay cuts from pilots and win approval to terminate their pension.
US Airways' unsolicited $8.9 billion offer to buy Delta has put management and the pilots union back on the same side. The union's support of Delta's stand-alone plan could give management a boost with the company's creditors committee in its bankruptcy case.
`A COMMON THREAT'
''We have a common threat from outside Delta Air Lines,'' the chairman of the pilots union's executive committee, Lee Moak said.
The union is concerned about further job and benefit cuts if US Airways buys the Atlanta-based company. It also is worried about routes being dropped, and it believes higher ticket prices will result from the deal.
Moak told fellow pilots in a memo Tuesday that ``should this merger be as misguided and as poor an idea as I currently believe it to be, then I will deploy every available resource to stop it.''
But can he?
''They do have a stake but probably not enough to block it,'' Ray Neidl, an airline analyst with Calyon Securities in New York, said of the pilots union.
But, Neidl added, ''You do want to have the cooperation of the employees'' if you are US Airways.
The Delta chapter of the Air Line Pilots Association has a seat on the nine-member creditors committee.
Moak said that the pilots union is in contact with other members of Delta's creditors committee. Delta, too, has been speaking to the committee.
Phil Gee, a spokesman for Tempe, Ariz.-based US Airways Group, said Wednesday his company is not surprised by the stance of the Delta pilots union.
MENDED FENCES
Delta's management and its pilots have come a long way in mending their differences.
Earlier this year, the union was threatening a strike over Delta's effort to reject the pilots contract and impose pay cuts.
In April, the two sides reached an agreement for $280 million in annual concessions, which was on top of $1 billion in annual concessions the pilots agreed to in a five-year deal in 2004. The pilots also agreed as part of the latest concessions deal not to fight Delta's effort to terminate their pension.
There was no strike. The pilots continued flying. Delta went back to restructuring its business as part of its plan to emerge from bankruptcy.
Then US Airways' takeover bid last week shook the street.
Moak says the union and Delta management can work well together now.
They may have to if they are going to beat back the US Airways offer, which has gained traction among some Wall Street investors.
''As far as the pilots are concerned, we're interested in a long-term viable carrier,'' Moak said. ``Right now, the Delta stand-alone plan provides that, and that's what we believe.''
