The battered shares of Delta Air Lines Inc. (DAL) rose Friday after its pilots agreed to pay cuts to try to help the ailing carrier escape bankruptcy, but their new contract offers no guarantees for the company's future.

Still, analysts call the pilots' assent to a 32.5 percent pay cut Thursday a linchpin in the struggle to turn Delta around.

Delta shares gained 49 cents to trade at $6.78 on the New York Stock Exchange (search).

Almost 80 percent of Delta's 7,000 pilots supported a new contract that will cut their pay by 32.5 percent and skip raises for the next five years. The concessions, which begin Dec. 1, will save Delta $1 billion yearly and were crucial as Delta attempts to persuade creditors to restructure more than $20 billion in debt.

"Everything was almost structured around the pilots deal," said Ray Neidl, an airline industry analyst with Calyon Securities Inc. in New York. "This was the web that holds it all together."

Officials with the union announced the results Thursday of a 10-day vote by the Atlanta-based company's pilots, who approved the plan with 79 percent of the vote.

Union leaders reached a deal with Delta after 15 months of negotiations. It calls for $1 billion in annual wage concessions.

In return, the pilots will get options to buy up to 15 percent of the company's stock.

In a memo to pilots Thursday, Delta CEO Gerald Grinstein (search) acknowledged the employees' sacrifices and said they "represent a Herculean effort to control our own destiny — a feat that is often attempted but seldom attained in our industry."

Union leaders say members — 91 percent of whom cast ballots — felt they had no other option.

"Our airline has been managed to the brink of bankruptcy and the Delta pilots had to decide between two bad choices," said John Malone, chairman of the pilots union's executive council. "They chose the lesser of two evils."

Delta pilots are currently among the highest-paid in the nation with salaries averaging between $100,000 and $300,000 a year.

Pilots cast ballots by phone and the Internet over the past 10 days. A simple majority was needed to ratify the agreement.

Delta has lost more than $6 billion since early 2001, during which time it has eliminated 16,000 jobs and cut the pay of other employees, including its executives. Last month, the airline reported a $651 million loss in the third-quarter.

Observers say a positive vote by the pilots was an absolute necessity if Delta hopes to stay out of bankruptcy court.

"It gives them a chance to fight another day," said Neidl. "It's what they needed to continue their restructuring for survival."

The agreement also includes changes to work rules to increase the efficiency of pilot scheduling, a freeze on the pilots' retirement benefits plan and higher premiums on the pilots' medical plans.

"We have bought Delta time to continue restructuring outside of the courts," Malone said. "It is now up to management to successfully execute a viable business plan."

The company said it needed the wage concessions to stay afloat. But company officials have warned that the agreement still may not be enough to avoid bankruptcy.

Delta also must convince the holders of its $20.6 billion in debt to restructure the repayment terms for all the pieces of its transformation puzzle to fall into place.

"There are no winners at this point," Grinstein wrote in the memo. "There are only people caught in the grips of a permanently changing industry and a demanding marketplace who are trying very hard, together and in good faith, to preserve careers and proud professions while helping their company survive, provide jobs and eventually grow profitably."