In another twist to the uncomfortable process of bringing Delta Air Lines back from the brink, the airline and its pilots will fight an objection from the Pension Benefit Guaranty Corp. over the deal struck on wage concessions. The pilots accepted a 14-percent pay cut and promised not to interfere with Delta’s plan to dissolve the existing pension plan. As part of the deal, pilots will get a $650 million note from the airline and also receive a $2.1 billion unsecured claim. The PBGC says both those financial instruments should go to PBGC because it will become the trustee of the pension if it is abandoned by Delta. The deal is also threatened by a group of retired Delta pilots. The Delta Pilots’ Pension Preservation Organization says the agreement sets the stage to sharply reduce their pension benefits. Delta’s active pilots have until May 31 to vote on the package and Air Line Pilots Association spokesman Lee Moak said the move by the retired pilots to undermine the deal is upsetting. “It is unfortunate that this threat to our careers and our airline now comes from some of our own former pilots,” Moak said. A bankruptcy judge will have the final say in both appeals.
Delta Pilots Fight Retired Delta Pilots And Pension Agency
Key Takeaways:
- Delta Air Lines' agreement with its active pilots, involving wage concessions and the dissolution of the existing pension plan, faces significant challenges.
- The Pension Benefit Guaranty Corp. (PBGC) objects to the deal, claiming the financial instruments promised to pilots should go to them as the potential pension trustee.
- A group of retired Delta pilots is also opposing the agreement, fearing it will sharply reduce their pension benefits.
- A bankruptcy judge will ultimately decide on the validity of these competing appeals against the proposed deal.
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