Delta unsecured creditors support debtor's cost-saving request to reject flight attendants agreement

By Caroline Salls

Pittsburgh, March 8 - Delta Air Lines, Inc.'s official committee of unsecured creditors supported the company's request to reject debtor Comair, Inc.'s flight attendant collective bargaining agreement, saying the labor cost savings is crucial to the company's future, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the filing, in order to successfully reorganize, Comair must restructure its costs, and the filing added it does not operate profitably because its costs, including labor costs, are too high.

Accordingly, the committee said Comair has implemented a restructuring plan that established a $42.3 million per year operating cost reduction target.

Included among the cost reductions were $17.3 million in annual labor cost reductions from pilots, $8.9 million from flight attendants and $1.0 million from mechanics.

The committee said Comair has already negotiated concessions from the pilots and the mechanics, but has met with strong resistance from the flight attendants, but "it is crucial that Comair attain the required cost savings from the flight attendants as the labor cost savings negotiated with the pilots and mechanics are expressly contingent on obtaining labor cost savings from the flight attendants."

According to the committee, if Comair cannot achieve its cost-savings target under the restructuring plan, it will continue to be unprofitable and will be unable to compete in the marketplace. In addition, Delta has informed Comair that, without a reduction in its controllable costs, Delta will shift its current and future regional flying business to other current Delta Connection carriers or other regional carriers, which the committee said "would be devastating to Comair's restructuring efforts."

The International Brotherhood of Teamsters represents Comair's flight attendants.

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

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