Delta CEO Sees Pilots Renegotiating Contracts Early
By ELIZABETH SOUDER
Of DOW JONES NEWSWIRES
NEW YORK -- Delta Air Lines Inc. (DAL) Chief Executive Gerald Grinstein said he thinks pilots will agree to renegotiate their salaries before the contracts run out because the alternative of waiting only puts the airline deeper in the hole, further jeopardizing pilot pay.
During a presentation to investors that was Web cast Tuesday, Grinstein said the proliferation of low-cost airline competition has left Delta with no pricing power. Therefore, it is critical to cut costs, he said.
Delta continues a program to cut non-labor costs, and the airline is reviewing its operations to realign the company to become profitable again. But Grinstein said excluding pilot pay, the airline is already competative in terms of costs. He thinks pilots will recognize this fact in coming months as he meets with pilots and their families.
"I think the fact of the case is very compelling. They know that no matter what happens with the strategic review, with that cost structure, Delta is unable to sustain itself in the market to remain an effective competator," Grinstein said.
Updated March 2, 2004 9:15 a.m.
