Delta Air Lines Inc. chief executive Gerald Grinstein yesterday said that even if the carrier's pilots approve a $1 billion cost-cutting agreement, the airline may still have to seek Chapter 11 bankruptcy protection.

Negotiators for Delta's pilots union tentatively agreed to a five-year contract late Wednesday that cuts pilots' pay by 32.5 percent starting Dec. 1 and allows for no raises. Under the terms, pilots also get options to purchase 30 million shares, or 15 percent of the company.

Delta's 7,000 pilots, the highest-paid in the nation, have until Nov. 11 to vote on the proposed contract. They earn between $120,000 and $260,000 a year, according to the union.

In an internal message to employees yesterday, Grinstein applauded the agreement but said there was no certainty that the carrier would not have to seek bankruptcy protection.

"While there can be no guarantees, the people of Delta are diligently and collaboratively making every effort to avoid bankruptcy," Grinstein said. "Time is of the essence, but given the additional sacrifices that undoubtedly will be required if we file for bankruptcy, I believe it remains in our collective best interest to restructure our company on our own."

Industry experts said it was likely that the pilots would approve the new contract to avoid facing steeper cuts in bankruptcy proceedings. US Airways Group Inc. filed for bankruptcy protection last month after failing to win an 18 percent cut in pay and benefit from its pilots. In bankruptcy court, the airline sought and received a 21 percent pay cut for nearly all employees. US Airways pilots then agreed on the original US Airways request and were able to avoid the steeper, court-imposed cut.

Merrill Lynch airline analyst Dan McKenzie said in a report yesterday that the Delta agreement was a good start, but that the airline had much more work to do to avoid having to seek protection from its creditors.

"Important pieces of the puzzle remain missing (such as) debt restructuring, further financing and final sign-off of the deal by the rank and file," McKenzie wrote. "If these pieces to the puzzle fall into place, Delta could avert a filing. If they do not, there remains a high risk of Delta filing for Chapter 11 by the end of November."

The last-minute agreement came as attorneys, consultants and Delta executives were preparing to submit bankruptcy court papers Wednesday, sources close to the airline said.

In a message to pilots, John Malone, head of Delta's pilots union, urged his members to approve the contract. "Reaching an agreement outside of bankruptcy court allows us to have some control over any changes to our contract," he said.

Atlanta-based Delta, the nation's third-largest carrier, has lost nearly $6 billion since 2001 and is carrying about $21 billion in debt.