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Delta Air Lines slashes salaries by 10 percent

Delta Air Lines Inc.'s chief executive said Tuesday he is declining his six-figure salary for the rest of the year as he detailed a 10 percent pay cut that will affect senior officials, administrative staff and ticket and gate agents.

CEO Gerald Grinstein also said in a memo to employees the Atlanta company will increase the shared cost of health care coverage and make changes to retirement benefits as part of its turnaround plan.

"In distressed times like these, when everyone must sacrifice, it is especially important that leadership participates, and they have. It is also necessary for me to lead the way," Grinstein wrote in the memo, adding that he has declined his salary.

Other airlines announced economic-related developments Tuesday:

US Airways, after asking a bankruptcy judge to cut union workers' pay and benefits, says it is slicing into its management costs.

American Airlines is recalling about 600 flight attendants on furlough, effective Nov. 17.

Delta would not immediately say how much salary Grinstein is relinquishing. His predecessor, Leo Mullin, earned about $500,000 a year.

Also Tuesday, Delta's pilots said they have ratified an agreement allowing Delta to employ newly retired pilots to prevent staffing shortages. Delta has warned it would have to file for bankruptcy if it didn't slow the pace of early pilot retirements by the end of September.

The agreement between Delta and its pilots includes written assurance from management that the company will not file notice of intent to terminate the pilots' pension plan before Feb. 1, even if the company files for bankruptcy protection by then.

Of voting pilots, 90 percent supported the tentative agreement, with 76 percent of eligible pilots casting a ballot.

Delta shares gained 40 cents, or 13.6 percent, to close at $3.34 in trading Tuesday on the New York Stock Exchange.

The cost cuts, meanwhile, are part of efforts by the nation's third-largest airline to avoid bankruptcy. The cuts do not affect pilots, who are unionized and work under a contract.

"We have a small window of opportunity available to us to avoid Chapter 11 that some other carriers do not have," Grinstein said in his memo to employees. "It is in everyone's best interest that we protect Delta's future by taking these steps together now."

US Airways says it has begun to implement a program that will save $40-million annually in management pay _ in addition to the $13-million in management benefits the company cited in a court filing Friday.

In addition, management and administrative payroll "is projected to be significantly further reduced" in the next 30 days, the airline said in the filing.

On Monday, US Airways spokesman David Castelveter said the airline is not yet ready to reveal details. The airline does not need court approval to cut the pay or benefits of nonunion workers.

American Airlines said Tuesday it needs the recalled attendants partly because of a projected increase in international flights in December.

"That means we'll need about 300 more flight attendants over our planned levels," said Tim Wagner of AMR Corp., American's corporate parent. "In addition, we've had a little bit more than planned attrition of flight attendants who are retiring."

The recalled attendants will be based in St. Louis, Boston, New York and Washington, D.C., Wagner said.

Information from Knight Ridder Newspapers was used in this report.

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