Atlanta Delta Air Lines pilots have agreed to slash their salaries by nearly a third and forgo pay raises for five years to help the struggling airline avoid bankruptcy, their union announced Thursday.
The $1 billion in wage concessions from Delta's 7,000 pilots is a huge victory for the Atlanta-based airline, which has lost more than $6 billion since early 2001.
The plan received 79 percent support from pilots who voted during a 10-day period by phone and the Internet. Voting ended at noon Thursday.
The agreement, which becomes effective Dec. 1, was tentatively reached by union leaders and Delta after 15 months of negotiations.
"Our airline has been managed to the brink of bankruptcy and the Delta pilots had to decide between two bad choices," said John Malone, chairman of the pilots union's executive council. "They chose the lesser of two evils."
Delta pilots are currently among the highest-paid in the nation with salaries averaging between $100,000 and $300,000 a year. In return for the 32.5 percent pay cut and lack of raises, the pilots get options to buy up to 15 percent of the company's stock.
The agreement also includes a freeze on pilots' retirement benefits, higher medical insurance premiums and changes to scheduling rules.
"We have bought Delta time to continue restructuring outside of the courts," Malone said. "It is now up to management to successfully execute a viable business plan."
Delta Air Lines Inc. has eliminated 16,000 jobs and cut the pay of other employees, including its executives, but has continued to lose money.