Delta Air Line's pilots negotiation committee last night reached a tentative cost-cutting agreement with the Atlanta-based airline. But union officials cautioned the agreement still had to be reviewed by the union leadership before being passed on to the membership for a vote.
Details of the agreement were not released. Sources familiar with the talks stressed that the agreement was preliminary and could be rejected by union leaders.
Delta is seeking $1 billion in pay and benefit cuts from its pilots. The nation's third-largest airline said that without the cuts, it would have to file for bankruptcy court protection.
Delta executives were prepared to begin filing bankruptcy papers yesterday but delayed action until after a membership vote.
Delta also pressed ahead with negotiations with creditors, including General Electric Co.'s GE Capital Aviation Services unit, in an attempt to free up cash through debt deferments and new financing.
Rumors that the airline and its pilots were nearing an agreement lifted Delta's shares over the past two days. Yesterday, Delta shares closed at $4.94, up 31 cents, or 6.7 percent.
Earlier this week, Delta reached an agreement with debt holders to defer payments on $135 million until 2005. Also this week, the airline received $600 million in financing from American Express Travel Related Services Co.
Delta is one of the most popular airlines in the Washington area, mainly due to its New York shuttle operations at Reagan National Airport.
Delta announced yesterday that it had reached a new tentative cost-cutting agreement with the union that represents its 185 flight superintendents. Details of the contract were not released.
If Delta files for bankruptcy protection, it would become the nation's fourth top-10 carrier to operate under court protection. Indianapolis-based ATA Airlines filed for bankruptcy protection Tuesday. Arlington-based US Airways Group Inc. last month took its second trip into bankruptcy court in two years. And UAL Corp.'s United Airlines has been operating under Chapter 11 protection for nearly two years.