July 2, 2008, Atlanta, GA - Northwest Airlines Corp. pilots stand to get a nearly
2.4 per cent equity stake in Delta Air Lines Inc. after the
combination of the two companies is completed, according to a
summary of a joint contract agreement reached between pilot
negotiators from both carriers.
The summary provided to Delta pilots on Monday says the
agreement, together with a previous one reached between Delta pilots
and management, also calls for compounded raises for pilots of over
18 per cent over four years.
Rank-and file Delta and Northwest pilots must approve the joint
collective bargaining agreement for it to become final.
Separately, Delta and Northwest pilots have agreed to submit to
binding arbitration to help them craft an integrated seniority list
if the two sides cannot reach a seniority deal on their own within a
certain timeframe.
Pilots value their seniority because it determines their
schedule, the aircraft they fly, and layoff protection.
Atlanta-based Delta is hoping to complete its stock-swap deal to
acquire Eagan, Minn.-based Northwest by the end of the year. The
combination, being proposed at a time of soaring fuel prices and
airline industry financial woes, would create the world's largest
carrier. Regulators and shareholders must sign off.
The joint contract agreement calls for pre-merger Northwest
pilots to receive a 2.38 per cent equity stake in the new Delta.
Current Delta pilots would receive a 3.5 per cent equity stake. The
summary sent by Delta union officials to Delta pilots says the two
amounts are proportional given the size of the two pilot groups.
There are about 5,000 Northwest pilots and about 7,000 Delta pilots.
``We believe that given the financial and industry environment in
which we find ourselves, this agreement provides significant gains
for the Delta pilots,'' the Delta pilot union officials said.
``Additionally, it positions Delta to make significant competitive
strides in the coming years, especially in international markets,
which would be reflected in profit sharing payouts and, most
important, in the prospect for a long-term financially stable
corporation which is in the best interests of all Delta pilots.''
Delta shares fell 17 cents, or three per cent, to $5.53 Tuesday,
while Northwest shares fell 14 cents, or 2.1 per cent, to $6.52.
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