Delta Air Lines will set a bankruptcy precedent Monday as a bitter dispute with its pilots goes to a panel of arbitrators instead of to a judge.
Delta, the USA's third-biggest airline, is seeking to slash costs and restructure in Chapter 11 reorganization. Normally, companies in bankruptcy protection present arguments to a federal judge if they want to break labor contracts to cut costs.
But in a first for the handling of labor contracts in bankruptcy, the outcome of Delta's contract feud with its pilots union will be decided by three professional arbitrators instead of a bankruptcy judge.
In public hearings starting Monday at a Washington, D.C., hotel, lawyers for Delta will try to persuade the arbitrators that to survive it must scrap its pilots' contract and impose cheaper terms.
Lawyers for the Air Line Pilots Association representing Delta's 6,000 pilots will argue that's unjustified. The arbitrators' decision will be binding.
USAToday
Delta, the USA's third-biggest airline, is seeking to slash costs and restructure in Chapter 11 reorganization. Normally, companies in bankruptcy protection present arguments to a federal judge if they want to break labor contracts to cut costs.
But in a first for the handling of labor contracts in bankruptcy, the outcome of Delta's contract feud with its pilots union will be decided by three professional arbitrators instead of a bankruptcy judge.
In public hearings starting Monday at a Washington, D.C., hotel, lawyers for Delta will try to persuade the arbitrators that to survive it must scrap its pilots' contract and impose cheaper terms.
Lawyers for the Air Line Pilots Association representing Delta's 6,000 pilots will argue that's unjustified. The arbitrators' decision will be binding.
USAToday
