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Published on 8/3/2006 in the Prospect News Distressed Debt Daily.

Delta unit's flight attendants' union appeals rejection of collective bargaining agreement

By Caroline Salls

Pittsburgh, Aug. 3 - Delta Air Lines, Inc. debtor Comair Airlines' court order approving rejection of its collective bargaining agreement with its flight attendants was appealed Thursday by the International Brotherhood of Teamsters, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

The court approved rejection of the contract agreement on July 24.

Comair's original motion to reject the agreements was denied in April, but the company renewed its request in June.

According to the original motion for rejection, the principal points dividing the airline and its union flight attendants included pay rates, possible wage snapbacks and benefits.

Comair proposed a 7.5% pay rate reduction, while the union proposed a 7% reduction.

The union also asked for a snapback of wages to prior contract terms at the end of four years, while Comair proposed a more modest pay increase at the end of four years.

In addition, the union's proposal required mandatory company contributions to the 401(k) plan for senior flight attendants, which Comair rejected.

According to Comair's renewed motion to reject the agreement, Comair reduced the size of its proposed flight attendant labor cost reductions, but the union refused to agree to the revised proposals.

Comair said changes to the flight attendants' pay rates, rules and working conditions are necessary to realize the labor cost reductions needed for successful reorganization.

Delta, an Atlanta-based airline, filed for bankruptcy on Sept. 14, 2005. Its Chapter 11 case number is 05-17923.


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