ATLANTA Delta and Northwest pilots have agreed to submit to binding arbitration to help them craft an integrated seniority list, if the two sides cannot reach a deal on their own within a certain time-frame.
Lee Moak, the head of Delta's pilots union, did not spell out that time-frame in a letter he sent to fellow pilots on Thursday.
However, the sides have said they hope to have an integrated seniority list by the time Atlanta-based Delta Air Lines Inc. completes its acquisition of Northwest Airlines Corp., based in Eagan, Minn., later this year. The combination is subject to regulatory and shareholder approval.
Pilots value their seniority, because it determines their schedule, the aircraft they fly and layoff protection.
Moak has said previously that pilot negotiators from Delta and Northwest were able to reach an agreement on a joint contract before the Delta-Northwest combination transaction was announced in April, but that was not finalized because they couldn't reach a deal on seniority.
On Tuesday, the two pilot groups reached a tentative agreement on a joint contract, leaving the thorny issue of seniority integration as the only major item left for them to resolve. This time, unlike before, they also agreed to a process on reaching an agreement on seniority that would seem to ensure an arrangement will be worked out one way or another.
Delta's pilot union leaders have approved the tentative contract agreement, while Northwest's pilot union leaders were scheduled to discuss the agreement Thursday. Once the agreement is approved by the leadership of both unions, it would go to the rank-and-file at both unions for separate approval.
The contract would take effect upon closing of the combination of the two airlines and would be amendable on Dec. 31, 2012.
In his letter to Delta pilots, Moak indicated that the joint contract calls for Northwest pilots to be brought up to the same pay scale as Delta pilots.
"The foundation of the joint collective bargaining agreement is the current Delta pilot working agreement," Moak said.
Northwest pilots, like Delta pilots, also will get equity in the combined company, according to a spokeswoman for Delta's pilot union.
Additional benefits for all pilots of the combined Delta include an extra 2 percent increase to the Delta pilots' defined contribution plan, 1 percent in 2011 and another 1 percent in 2012. That would bring the total retirement plan contribution percentage to 14 percent.
Moak said the defined contribution plan percentage will be phased in for pre-merger Northwest pilots over the term of the agreement.
As far as the seniority integration issue, the two sides have agreed to a process that provides for a period of discussions designed to reach a negotiated agreement.
Moak said that if the two groups are unable to reach an agreement within a certain time-frame, then the two sides will enter into binding arbitration before a panel of three arbitrators.
The resulting seniority list, whether achieved through negotiations or arbitration, will be final and binding and will be incorporated into the joint collective bargaining agreement, Moak said.
The joint contract, if ratified, requires Delta to accept the results of the seniority integration process subject to certain conditions, Moak said. The agreement covers roughly 12,000 pilots from both airlines.
The airlines do not need a joint pilot contract to combine, but it will help them integrate faster and more smoothly. They are trying to avoid the fate of US Airways Group Inc. Three years after it joined with America West Airlines, its pilots feud got so bad that pilots ousted the Air Line Pilots Association and formed a new union. They still do not have a contract covering pilots from both airlines.
Pilots are the only major unionized group at Delta, while Northwest's front-line work force is heavily unionized.