Delta Air Lines Inc. says it's going to fly into the 21st century on something other than a Boeing 777 jumbo jet.
In an unusual move, the nation's second-largest airline said yesterday that it had deferred the orders it had placed for 11 of the jumbo jets and might even sell the two it already has because it can't come to an agreement with its pilots union over pay rates.
But the airline's announcement may simply be saber-rattling because the new aircraft was to play a key role in the company's future growth. The company said it plans to continue negotiations with pilots in the hopes of eventually working something out.
The company and the union insist they are prepared to continue negotiations. The next negotiating session is scheduled Thursday.
The basic disagreement is whether captains flying the new planes should get a base annual salary of $223,385 ($238.66 an hour) as the company has offered, or the $298,546 ($318.96 an hour) the pilots want.
Delta Chairman Leo Mullin said in a statement that he regretted the action and acknowledged the 777 aircraft was "an integral part" of the airline's future growth plans. "However, Delta's ultimate degree of success is not dependent on any single aircraft type, and we will aggressively define other ways to continue Delta's admirable forward movement," he said.
Delta said it canceled the aircraft orders because the Air Line Pilots Association, which represents the airline's pilots, has indicated it would not continue flying the two 777 aircraft already in service beyond Nov. 1 unless there was a pay agreement.
The union, in a telephone hot line message to its members, suggested that Delta wasn't too interested in acquiring the 777s, at least not now. Calling the decision to defer purchase of the new planes "not unexpected," the union said, "management has shown little interest in reaching agreement with the pilots." Since the February opening of negotiations, the union said, Delta has barely altered its opening wage offer.
The union said it believed Delta's decision was based more on a softening in the North Atlantic markets than it has to do with pilots pay. Delta is the No. 1 U.S. carrier in the transatlantic market and the airline gets nearly 15 percent of its revenue from those routes.
The orders for the 277-passenger 777-200s were part of a 20-year aircraft purchase plan with Boeing. Delta said yesterday it would pursue substitute arrangements to take delivery of other aircraft now on order with Boeing, most likely for the 252-passenger 767-300 aircraft.
Delta's stock fell 25 cents yesterday to $57 on the New York Stock Exchange.