retirees reach benefit deal
By Harry R. Weber, Associated Press
Friday, October 6, 2006
ATLANTA - Delta
Air Lines Inc., which is operating under bankruptcy protection,
reached an agreement Thursday with thousands of retirees on
changes to medical benefits that will save the nation's No. 3
carrier about $50 million annually.
The deal, which would need to be approved by a bankruptcy court
judge, covers a portion of roughly 42,000 pilot and non-pilot
retirees, their spouses and survivors, Delta spokeswoman Betsy
A hearing is scheduled for Oct. 19.
Delta, which has lost more than $16 billion since January 2001,
has been restructuring all elements of its business as it seeks
to emerge from Chapter 11 protection by the middle of 2007. A
particularly thorny issue has been cuts to retirement benefits.
Pilots already agreed to allow the airline to terminate their
For non-pilots, Thursday's agreement means that certain retirees
will go from paying no premiums for their health care coverage
before reaching 65 to paying a portion of the cost of their
coverage, court papers say. Others will go from paying 10
percent to 25 percent of the cost and others will go from paying
22 percent to 35 percent of the cost. Those non-pilot retirees
currently over 65 will be eligible for a $50 monthly subsidy
toward the premium for medical and prescription drug coverage.
There also are changes to medical benefits for pilot retirees
under the agreement.
Delta has agreed to place limits on further changes to certain
of the cost-sharing percentages through 2010 and to establish a
fund that will include premium subsidies for certain retirees
who experience hardships from the changes.
The benefit changes will become effective on Jan. 1, if
"There are no happy faces in bankruptcy court," Dean Gloster, a
lawyer for a committee that represents some of the retirees,
said. "But Delta agreed to protections for the remaining
retiree medical benefits that we could never have gotten in
In a letter Thursday to retirees, Robert Kight, vice president
of compensation, benefits and services at Delta, said the
airline's goal has been to find ways to restructure its costs.
"Together we created solutions that have addressed this
situation sensitively and equitably within the range of what the
company can now afford," Kight wrote.