Delta to Take Delivery of Boeing 717 Aircraft Upon Ratification of Pilot Tentative Agreement

Delta to upgauge fleet while replacing less efficient aircraft

Pilot agreement and aircraft transactions provide value to Delta people, customers and shareholders

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May 22, 2012, 12:15 ET

ATLANTA, May 22, 2012 /PRNewswire/ -- Delta Air Lines (NYSE: DAL) will begin taking delivery of Boeing 717 aircraft as early as 2013 upon ratification of a new tentative agreement covering Delta's more than 12,000 pilots. The tentative agreement was approved on May 21 by the Master Executive Council (MEC) of the Delta Air Line Pilots Association (ALPA), and now will be presented to pilots for review and ratification through June 30.

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The tentative agreement provides career growth opportunities as well as pay and benefits improvements for Delta pilots, while providing Delta productivity gains and additional aircraft flexibility, including an opportunity to accelerate its domestic fleet restructuring to provide a better customer travel experience.

If ratified, the agreement will accelerate Delta's domestic fleet restructuring strategy. To this end, Delta has reached an agreement in principle with Southwest Airlines and Boeing to lease 88 Boeing 717 aircraft currently in service at Southwest subsidiary AirTran Airways that is conditioned upon pilot ratification of the tentative agreement. The aircraft will primarily replace inefficient 50-seat regional jets and some older DC-9 aircraft still in service, on a capacity-neutral basis.

The tentative agreement also provides Delta with additional flexibility to acquire up to 70 larger two-class, 76-seat regional jets as the Boeing 717 aircraft are delivered to Delta. Delta currently operates 255 larger two-class regional jets; the fleet will be increased to 325 aircraft.

"These actions pave the way for us to restructure and upgauge our domestic fleet, which will lower our costs, provide more pilot jobs and improve the onboard experience for our customers," said Delta CEO Richard Anderson. "The addition of the Boeing 717s, additional large regional jets and the planned replacement of 50-seat aircraft continue Delta's commitment to operating an efficient, flexible domestic fleet that offers customers even more opportunities to upgrade to our First Class and Economy Comfort cabins."

In addition to aircraft flexibility, the tentative agreement will provide for productivity enhancements as well as improvements to the total compensation package for Delta pilots, including increases to base pay. The agreement also provides for a modification of the profit sharing program for pilots so that it pays 10 percent of profits, compared with 15 percent today, on the first $2.5 billion of profits effective Jan. 1, 2013. The plan will continue to pay 20 percent of profits above $2.5 billion. A voluntary early retirement option recently offered to Delta's other employee groups also will be available to Delta pilots upon ratification of the tentative agreement.

"Delta, our pilots and ALPA continue to benefit from a very constructive, proactive relationship, one that is unprecedented in our industry," said Mike Campbell, executive vice president – Human Resources and Labor Relations. "This tentative agreement represents an investment in our pilots and our company as it gives Delta significant fleet flexibility, the ability to continue running a reliable operation for our customers, and a profitable enterprise for shareholders and for all Delta people. The fleet changes provided by this agreement, coupled with the productivity and profit sharing changes, cover the investments in our employees.

"We strongly support the Delta MEC's endorsement and are optimistic that Delta pilots will ratify the tentative agreement," Campbell said.

Pilots have approximately five weeks to review and ratify the tentative agreement. If approved by the June 30 deadline, the agreement would take effect July 1, 2012. The agreement becomes amendable Dec. 31, 2015.

Negotiating committees for Delta and ALPA announced on May 15, 2012, that a tentative agreement had been reached. During the next several days the tentative agreement was reviewed and subsequently approved by the Delta MEC on May 21.

Delta Air Lines serves more than 160 million customers each year. During the past year, Delta was named domestic "Airline of the Year" by the readers of Travel Weekly magazine, was named the "Top Tech-Friendly U.S. Airline" by PCWorld magazine for its innovation in technology and won the Business Travel News Annual Airline Survey. With an industry-leading global network, Delta and the Delta Connection carriers offer service to nearly 350 destinations in 62 countries on six continents. Headquartered in Atlanta, Delta employs 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 13,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita. The airline's service includes the SkyMiles frequent flier program, a world-class airline loyalty program; the award-winning BusinessElite service; and more than 50 Delta Sky Clubs in airports worldwide. Delta is investing more than $2 billion through 2013 in airport facilities and global products, services and technology to enhance the customer experience in the air and on the ground. Customers can check in for flights, print boarding passes, check bags and review flight status at delta.com.