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ATA Pilots Accept Wage Cuts

Wed Feb 16, 2005 3:30 am

Pilots at ATA Airlines on Monday ratified a deal that cuts their pay by 20 percent and saves bankrupt ATA up to USD$12 million over four months while it restructures.

The pay cut is even deeper than one the pilots rejected a month ago. The change of heart reflects pilots' growing confidence in the airline's reorganization efforts, particularly a new program that lets ATA and Southwest Airlines sell seats on each other's flights, according to the Air Line Pilots Association, the union that represents the pilots.

"Today's results prove our crew members have renewed confidence in the direction our new management has taken to save our airline," said Erik Engdahl, chairman of ALPA's ATA master executive council, in a statement.

"Our crew members have sent a clear message to Wall Street that we are willing to be part of the new ATA, and work hard to make our code-share agreement with Southwest Airlines succeed," he said.

Out of 968 pilots and flight engineers eligible to vote, 78 percent voted in favor of the agreement.

The four month deal cuts the pay of pilots and flight engineers by 20 percent, cuts company contributions to a flight crew retirement plan by 50 percent and makes other work rule changes. The cuts are effective from February 1.

"ATA Airlines is most appreciative of the decision by a majority of cockpit crew members to support this concession package. It represents additional savings to the airline of nearly USD$12 million over the next four months," said Gilbert Viets, ATA's chief financial officer, in a statement.

Last month, ATA pilots overwhelmingly rejected a tentative labor deal that would have cut pilots' pay by 15 percent, giving the airline up to USD$6 million in immediate savings. ATA's pilots approved a USD$43 million concession package in June.

ATA, which filed for Chapter 11 bankruptcy protection in October, is trying to cut costs after being hit by soaring fuel prices, low revenue and competition.

ATA accepted a USD$117 million bid in December from Southwest for some assets, including the lease rights to six of ATA's 14 gates at Chicago's Midway Airport.

That deal also featured a code-share arrangement that links, by way of Chicago, airports in about 40 cities served by Southwest with airports in 10 cities served by ATA. Southwest has said each carrier could make an additional USD$25 million to USD$50 million in revenue through code-sharing.

Earlier on Monday ATA won court approval for another three months to file its own bankruptcy reorganization plan without interference from creditors or other parties. The court extended ATA's exclusivity to May 24. The current exclusivity period was due to expire at the end of February. The airline has said it hopes to have a reorganization plan by April.


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