Delta/Northwest pilots ratify contract agreement
WASHINGTON (Reuters) - Pilots at Delta Air Lines Inc and Northwest Airlines Co ratified a contract agreement on Monday that includes seniority and wage provisions to take effect if the companies complete their merger, the union representing both groups said.
Delta hopes to complete its purchase of Northwest before the end of the year, if the proposal receives approval from antitrust enforcers at the U.S. Justice Department.
"This historic milestone marks the first time that a labor agreement has been reached in advance of the close of an airline merger," said Lee Moak, chairman of the Delta chapter of the Air Line Pilots Association.
Shares of Delta were up 2.4 percent in regular New York Stock Exchange trading on lower oil prices and rose 3.2 in extended trading. Northwest shares were little changed.
Pilots are the only unionized work group at Delta. Flight attendants, baggage handlers and most other frontline workers at Northwest are members of various unions.
There are roughly 7,000 pilots at Delta and 5,000 at Northwest. But both companies are cutting domestic capacity and jobs to reduce costs with fuel expenses more than doubling over last year.
Details of the agreement were not disclosed but pilots would receive pay raises and other benefits at the new company, officials have said previously. Pilots would also get an equity stake in the merged entity.
"It is far superior to the traditional well-worn labor role in that all pilots will receive financial returns from day one for the value we provide to the merger," Moak said.
A cornerstone of the deal is a process for sorting seniority between the two pilot groups, a sticking point in labor negotiations that initially held up the entire merger proposal.
Union seniority is crucial for determining when airline pilots work and what planes they fly as well as career advancement.
Northwest union chief, Dave Stevens, said the seniority provision was fair. The two sides have agreed to arbitration, if seniority negotiations fall short.
(Reporting by John Crawley; Editing by Tim Dobbyn)
