Monday, May 10, 2004

ATLANTA (AP) — Delta Air Lines said yesterday that it may have to file for bankruptcy if its pilots union doesn’t agree to significant wage cuts, the first time that the struggling carrier has publicly linked the two issues in a regulatory filing.

The nation’s third-largest airline has been cautious about discussing the possibility of bankruptcy. But Delta said yesterday in a quarterly report with the Securities and Exchange Commission that it might pursue Chapter 11 unless it achieves a “competitive cost structure” for pilot wages.

A spokesman for Delta acknowledged that it is the first time such language has been used in a public filing.

“It’s an option,” spokesman Anthony Black said of bankruptcy. “It’s not anything we see in the foreseeable future, but it’s out there.”

Shares of Delta fell 84 cents, or 15.6 percent, to close at $4.54 on the New York Stock Exchange, the company’s lowest close on record since 1980.

The pilots union released a statement that it is willing to help Delta cut costs and has attempted to negotiate with the company.

Delta is seeking a 30 percent pay cut from pilots, who are agreeable to 9 percent and to forgo a 4.5 percent raise they were to have received earlier this month.

Delta has lost more than $3 billion and laid off 16,000 employees in the past three years. In the first quarter, it lost $387 million.

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