"Delta Air Lines today confirmed that the Air Line Pilots Association, the union representing the airline's approximately 6,000 pilots, has ratified the tentative agreement and has agreed to present it to its membership for ratification by May 31, 2006," the airline said in a statement.
"This is a reflection of a shared commitment to work together to help deliver the cost savings the company needs to successfully emerge from bankruptcy and to become the fierce competitor we know we can be," said Gerald Grinstein, Delta's chief executive officer.
The deal still needs a green light from both Delta pilots and the bankruptcy court overseeing Delta's restructuring. If approved by both, it will be effective June 1, and become amendable on December 31, 2009, the company statement said.
The agreement calls for $280 million in annual cuts to pilot labor costs, as opposed to the $325 million Delta originally sought.
"We agreed to reduce our proposal and make improvements to the overall package recognizing the likelihood the pilot pension plan would be terminated," said Edward Bastian, Delta's chief financial officer.
Grinstein acknowledged that the agreement represents both "an important piece of our restructuring puzzle" and "additional hardship for our pilots."
Traditional U.S. airlines, suffering from high overheads including labor costs, have been in a tailspin since the Sept. 11, 2001 attacks and a subsequent slump in air travel. High fuel prices have worsened their woes.
In September, Delta announced its intention to slash 17% of its workforce, or 7,000 to 9,000 employees, by the end of 2007 as part of a plan to save three billion dollars by December 2007.
The budget cuts were in addition to $5 billion in reductions included in a September 2004 restructuring plan.
But Delta wanted the pilots to agree to millions of dollars in extra pay cuts on top of what had already been agreed, angering the union.
Delta reported a record loss in 2004 of $5.2 billion. The last time it turned a profit over the year was in 2000.
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