Pilot retirements at Delta balloon
Wednesday, December 1st 2004, 10:58 am
By: News On 6
ATLANTA (AP) _ The number of Delta Air Lines Inc. pilots who retired effective Wednesday, the day a 32.5 percent pay cut went into effect, ballooned to 229, more than three times as many as in November.
Of those who submitted their papers by Wednesday, 197 were early retirements, said Karen Miller, a spokeswoman for the pilots union. The normal pilot retirement age at Delta is 60. Senior pilots with enough years of service can retire early at age 50.
The news comes a few weeks after pilots ratified the pay cuts agreement with management. The cuts will remain in effect until 2009. Pilots also agreed to a 16 percent reduction in vacation pay, changes to the composition of the pension plan and increased cost sharing for active pilot and retiree medical benefits.
Without the $1 billion in pilot concessions, Atlanta-based Delta warned that it would have to seek bankruptcy protection. Even with them, the nation's third-largest airline could still be forced into Chapter 11 because of its $20.6 billion debt.
Miller had said Tuesday that at least 100 pilots were expected to retire effective Wednesday. But pilots had until midnight Tuesday to decide.
Those pilots who retired on Wednesday will receive retirement benefits based on their salaries before the pay cuts, Miller said. On Nov. 1, 69 pilots retired, 55 of which were early. Ninety-nine pilots retired Oct. 1, 71 of them early. Since Jan. 1, 694 of the airline's pilots have retired, of which 506 have been early.
Delta warned about the consequence of the continued wave of retirements in a regulatory filing two weeks ago.
``If our pilots retire prior to their normal retirement at age 60 at greater than historical levels, this could disrupt our operations,'' Delta said in a Nov. 15 Securities and Exchange Commission filing.
To try to ease staffing shortages, Delta reached an agreement with the pilots union in late September to allow pilots who retire early to return to duty on a limited basis. But the program is voluntary for pilots and is an option for those who sign a waiver before retiring, the union's Miller said.
Only three of 71 pilots who retired early on Oct. 1 were rehired under the agreement, according to the SEC filing. The airline has not said how many of the 55 early retirements in November agreed to return.
As of mid-November, about 2,000 of the airline's roughly 7,000 active pilots were eligible to retire, according to the airline.
Delta pilots who retire can elect to receive half their pension benefits in a lump sum and the other half as an annuity later, regulatory filings show.