At least 100 Delta Air Lines Inc. pilots are expected to retire effective today, the start date for a 32.5% pay cut agreed upon in a $1-billion concessions package aimed at saving the nation's third-largest air carrier from a bankruptcy filing.
The exact number and breakdown of early retirements versus normal retirements will not be known until today, said Karen Miller, spokeswoman for the pilots union. But she said she expected a total of at least 100 pilot retirements.
Those pilots who retire will receive retirement benefits based on their salaries before the pay cuts, Miller said.
"We do anticipate there will be a higher number of early retirements for Dec. 1 than we have experienced for several months," she said.
Delta pilot retirements are effective the first day of every month and the employees need to give only one day's notice.
Ninety-nine pilots retired Oct. 1, 71 of them early. On Nov. 1, 69 pilots retired, 55 of them early. Since Jan. 1, 694 pilots have retired, 506 of them 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.
Asked about the effect of today's expected retirements on Delta's operations, Peggy Estes, a company spokeswoman, had no immediate comment.
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% 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 airline could still be forced into Chapter 11 because of its $20.6-billion debt.
Shares of Delta fell 2 cents to $6.97 on the New York Stock Exchange.