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Delta Says Profit Forecast Hinges on Pilot Talks

November 03, 2005|From Associated Press

ATLANTA — Delta Air Lines Inc., which expects more than $2 billion in losses this year, said Wednesday that it would return to profitability two years from now if, among other things, it could wring concessions from its pilots and jet fuel didn't get more costly.

The pilots, meanwhile, said they had not ruled out a strike as a showdown over the cuts loomed.

In a letter to pilots, the chairman of the union's executive committee, Lee Moak, said he had authorized the reestablishment of a strike preparedness committee, adding that the union would not give in to the airline's demands for $325 million in cuts without a fight.

"Faced with this management onslaught, our only choice is self-defense," Moak wrote in his Wednesday letter.

The comments came after the carrier filed a motion in Bankruptcy Court on Tuesday asking a judge to void the pilots' collective bargaining agreement and allow the company to impose the cuts unilaterally.

Whether the pilots would be able to strike under rules of the Railway Labor Act is an open question.

"Whether or not to proceed down that path, that decision will be made by the representatives of the pilots, and it's just another piece of an overall strategy we will use to convince management to negotiate toward a consensual agreement," union spokesman John Culp said.

Asked whether the union would strike if it could, Culp said, "We're not ruling it out."

Delta spokeswoman Chris Kelly declined to address the union's comments but said the company remained hopeful that an agreement could be reached.

The Atlanta-based airline's projection of a $498-million annual profit in 2007, its first since 2000, was included in a Securities and Exchange Commission filing.

Delta, which filed for bankruptcy protection Sept. 14, said its expected $2.1-billion loss for this year, which excludes one-time items, would narrow to a $412-million loss in 2006, followed by the projected profit in 2007.

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