ATLANTA – Delta Air Lines' (search) pilots union said late Wednesday it had reached a tentative agreement on concessions that could save the struggling carrier from bankruptcy.
Union spokeswoman Karen Miller said the deal came after 15 months of negotiations that have intensified in recent days. She said the union would review the agreement, but would not provide details for now.
Atlanta-based Delta had said it would have to seek bankruptcy protection if it didn't get $1 billion in concessions from its 7,000 pilots. Miller would not say if the tentative agreement covered $1 billion.
The nation's third-largest airline was expected to decide by Wednesday whether to seek Chapter 11 protection (search) from creditors. It said that could be delayed if the airline and pilots' union reached an agreement. A company spokeswoman said Wednesday night no decision had been made. She declined to elaborate.
The deal must be ratified by rank-and-file pilots, which could take several days.
Tuesday was Delta's self-imposed deadline for debtholders to respond early to an exchange offer intended to give the airline breathing room. The deadline came and went without any word from Delta on its progress.
Delta had offered to exchange $680 million of its debt with new notes secured by $1.2 billion worth of debt-free aircraft, flight simulators and flight training equipment. The offer was made to holders of $2.6 billion in various forms of Delta debt.
Earlier this month, Delta extended a debt exchange offer to Nov. 18, but said it would give some creditors a better deal if they agreed to the terms by Tuesday. There was no word about what the creditors' response has been.
Delta has warned that its debts could force it into bankruptcy, even if its unions agree to big concessions.
The pilots have publicly offered up to $705 million in savings but have not released details of subsequent offers.
In a regulatory filing made earlier this month, Delta said that to date the union's "counterproposals have been for substantially less than $1 billion." The company also said in the filing that the union was requesting for pilots a stock option program that involves "substantially more equity" than management's proposal.
Delta has lost more than $6 billion since early 2001, during which time it has also cut 16,000 jobs. Delta plans to cut up to another 7,000 jobs in the next 18 months. Last week, the struggling airline reported a $651 million loss in the third-quarter.