- Jul 26, 2004
- 598
- 1
Check this out:
AP
Lawyer Speaks Up for Delta Retired Pilots
Wednesday September 28, 5:50 pm ET
By Aleksandrs Rozens, AP Business Writer
Delta's Retired Pilots Should Be Paid Before Other Creditors, Lawyer Says
NEW YORK (AP) -- Delta Air Lines Inc.'s retired pilots should be put ahead of other creditors as the bankrupt airline works out its debt problems, a lawyer for the retired pilots said Wednesday.
Dean Booth, a partner at the law firm Schreeder, Wheeler & Flint who is representing the approximately 4,500 retired pilots, said they are entitled to receive pension payments under a collective-bargaining agreement reached before Delta filed for bankruptcy protection on Sept. 14.
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Booth said the payments are effectively akin to salaries of current employees.
"Bankruptcy law requires collective bargaining agreements to be honored unless the agreements are changed by a bankruptcy judge or by consent of the parties," Booth told The Associated Press at a meeting between the airline and its creditors at a New York hotel.
In the first step toward restructuring Delta's debt, the meeting resulted in the creation of a committee that will represent unsecured creditors. The committee has nine members, including Boeing Co., the Airline Pilots Association, aircraft-engine maker Pratt & Whitney, the Pension Benefit Guaranty Corp, Bank of New York Co. Inc., and Coca-Cola Co.
The retired pilots are the third-largest creditor based on the current value of their pension benefits, which are estimated at about $1 billion. Delta's total debt is $28.3 billion.
A continuing exodus of Delta pilots has drained the pension plan to the point where future lump sum payouts to retirees by the bankrupt carrier may be in jeopardy, according to the union. Delta has said it does not plan to make the next scheduled contribution to the pension fund.
About 300 people crowded a conference room at a Marriott on Manhattan's East Side, where executives from the airline said they hoped to turn a profit and achieve cost savings of $3 billion by 2007 by lowering employment costs, improving productivity and restructuring debt.
Edward Bastian, the chief financial officer of Delta, told creditors at the meeting that the company "must run a frugal, cost-conscious airline."
Like other major carriers, Atlanta-based Delta has been struggling to deal with competition from low-cost carriers such as JetBlue Airways Corp. as well as high fuel costs.
"I think the trustees got a good, diverse committee which should help with the process," said Benjamin DeCosta, aviation general manager of Hartsfield-Jackson Atlanta International Airport which is Delta's largest hub and is operated by Atlanta's department of aviation.
But, he added, "having an airport on the (creditors) committee could only add to its strength. Our concern is for the success of Delta."
Yeah right, like this is going to happen.
AP
Lawyer Speaks Up for Delta Retired Pilots
Wednesday September 28, 5:50 pm ET
By Aleksandrs Rozens, AP Business Writer
Delta's Retired Pilots Should Be Paid Before Other Creditors, Lawyer Says
NEW YORK (AP) -- Delta Air Lines Inc.'s retired pilots should be put ahead of other creditors as the bankrupt airline works out its debt problems, a lawyer for the retired pilots said Wednesday.
Dean Booth, a partner at the law firm Schreeder, Wheeler & Flint who is representing the approximately 4,500 retired pilots, said they are entitled to receive pension payments under a collective-bargaining agreement reached before Delta filed for bankruptcy protection on Sept. 14.
ADVERTISEMENT
Booth said the payments are effectively akin to salaries of current employees.
"Bankruptcy law requires collective bargaining agreements to be honored unless the agreements are changed by a bankruptcy judge or by consent of the parties," Booth told The Associated Press at a meeting between the airline and its creditors at a New York hotel.
In the first step toward restructuring Delta's debt, the meeting resulted in the creation of a committee that will represent unsecured creditors. The committee has nine members, including Boeing Co., the Airline Pilots Association, aircraft-engine maker Pratt & Whitney, the Pension Benefit Guaranty Corp, Bank of New York Co. Inc., and Coca-Cola Co.
The retired pilots are the third-largest creditor based on the current value of their pension benefits, which are estimated at about $1 billion. Delta's total debt is $28.3 billion.
A continuing exodus of Delta pilots has drained the pension plan to the point where future lump sum payouts to retirees by the bankrupt carrier may be in jeopardy, according to the union. Delta has said it does not plan to make the next scheduled contribution to the pension fund.
About 300 people crowded a conference room at a Marriott on Manhattan's East Side, where executives from the airline said they hoped to turn a profit and achieve cost savings of $3 billion by 2007 by lowering employment costs, improving productivity and restructuring debt.
Edward Bastian, the chief financial officer of Delta, told creditors at the meeting that the company "must run a frugal, cost-conscious airline."
Like other major carriers, Atlanta-based Delta has been struggling to deal with competition from low-cost carriers such as JetBlue Airways Corp. as well as high fuel costs.
"I think the trustees got a good, diverse committee which should help with the process," said Benjamin DeCosta, aviation general manager of Hartsfield-Jackson Atlanta International Airport which is Delta's largest hub and is operated by Atlanta's department of aviation.
But, he added, "having an airport on the (creditors) committee could only add to its strength. Our concern is for the success of Delta."
Yeah right, like this is going to happen.
