ATLANTA -- Delta Air Lines Inc.'s pilots started voting yesterday on a union contract proposal that would cut their salaries by nearly a third, while the company said it secured another $500 million in financing to help the ailing airline stave off bankruptcy.
The proposed pilots' agreement, reached by union leaders last Wednesday after 15 months of negotiations, includes $1 billion in wage concessions by Delta pilots, who are currently among the highest paid in the nation with salaries averaging between $100,000 and $300,000 a year.
Company officials say the concessions are necessary to keep the nation's third-largest carrier afloat as it attempts to restructure its finances without having to file for bankruptcy.
The union's 7,000 pilots began casting their ballots over the phone and Internet at noon yesterday and the voting will continue over the next 10 days, pilots' union spokewoman Karen Miller said. She said the results will not be tracked until the voting ends at noon on Nov. 11.
As it awaited the pilots' vote, Delta received a commitment from GE Commercial Finance for $500 million in financing.
Delta said $200 million of the financing will be in loans, to be repaid in 12 equal monthly installments, starting two years after it gets the money. The remaining $300 million will be in the form of a credit line that will mature within three years.
Delta already has secured a commitment of up to $600 million in financing from a unit of American Express Co. and an agreement to defer $135 million of its debt for two years. However, those deals are conditioned on Delta achieving all of its cost-cutting targets, including the pilots' wage concessions.
Shares of Delta rose 10 cents to close at $5.55 yesterday on the New York Stock Exchange.