Northwest pilots to receive equity stake in Delta

Pilots for Northwest Airlines will receive around a 2.4 percent equity stake in Delta Air Lines when the two companies have combined forces, according to a summary of the joint contract agreement that was reached by negotiators for pilots of both airlines.

The joint agreement also calls for raises for pilots amounting to more than 18 percent over four years, also according to the summary that was provided to Delta pilots early in the week.

Both Delta and Northwest pilots need to approve the collective bargaining agreement before it becomes final.

Separately, pilots from both airlines agreed to submit to binding arbitration that would help create an integrated pilot seniority list – if the two sides are not able to reach a seniority agreement on their own, within a specified period of time.

Pilot seniority has an impact on their schedule, which aircraft they fly, and protection against layoffs.

Delta hopes to complete its stock-swap arrangements to acquire Northwest by the end of this year. This airline combination, coming at a time of soaring jet fuel prices and airline industry financial troubles, would create the largest carrier in the world. Both regulators and shareholders have to sign off on the proposed agreement.

The joint agreement calls for current Delta pilots to receive a 3.5 percent equity stake in the combined airline. In all, around 5,000 Northwest pilots and 7,000 Delta pilots are involved.

“We believe that given the financial and industry environment in which we find ourselves, this agreement provides significant gains for the Delta pilots,” commented an official of the Delta pilots’ union. “Additionally, it positions Delta to make significant competitive strides in the coming years, especially in international markets, which would be reflected in profit sharing payouts and, most important, in the prospect for a long-term financially stable corporation which is in the best interests of all Delta pilots.”

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