ATLANTA The head of Delta Air Lines Inc.'s pilots union said Monday he doesn't think that record fuel prices eating away at the company's cash reserves will force management to ask for pilot concessions as the carrier proceeds with its acquisition of Northwest Airlines Corp.
Delta pilots are trying to work out a joint contract with Northwest pilots so they can then tackle the thornier issue of seniority list integration. Delta's pilots, in a deal they worked out with Delta, are in line for pay raises and an equity stake in the new company.
Asked if Delta might seek to change that deal in the future, given that the price of oil has soared and is currently at about $134 a barrel, Lee Moak, chairman of the Delta pilot union's executive committee, said in an interview, "No. We don't see that."
"Hypothetically, if oil goes to $200 a barrel and we're not able to raise ticket prices and people stop flying the airlines, anything can happen," Moak said. "But at some point, something is going to have to give. I don't think it's going to be labor concessions. I think it's going to be rational ticket pricing to cover our cost."
Delta is cutting domestic capacity and shedding front-line jobs as it tries to weather the high price of fuel. Fares also have risen at times. Executives have hinted that more changes could be on the horizon if oil continues its meteoric rise.
Moak reiterated the union's goal of reaching a joint contract and seniority-list integration agreement with Northwest pilots before Atlanta-based Delta completes its acquisition of Northwest, based in Eagan, Minn. The stock-swap deal, announced April 14, is expected to close by the end of the year, once it receives regulatory and shareholder approval.
"The contract could be done relatively quickly," Moak said. "It's just a matter of the parties coming together."
The bigger issue is whether the two sides can reach a seniority deal.
Seniority is important for pilots because those at the top of the list get first choice of vacations, the best routes and the bigger planes that they get paid more for flying. It is also often the reason pilots do not leave to work for another airline.