In Business This Week: HEADLINER: RONALD ALLEN
THE PILOTS BLOCK DELTA'S FLIGHT PATH
There's turbulence ahead for Delta Air Lines. A year into a three-year program to trim operating costs by $2 billion, Chief Executive Ronald Allen has made great progress. He has cut 10,000 jobs, experimented with ticketless flying, slashed agents' commissions, outsourced data processing, and agreed to share routes with foreign airlines. By June 30, the savings will be $1.2 billion.
But on one vital issue--cutting pilot costs--Allen has hit a wall. Delta aims to cut $340 million, but there has been little headway since October. The two sides still are "hundreds of millions of dollars apart," says Harry C. Alger, operations vice-president. So, on Apr. 17, Delta asked a federal mediator to help resolve things.
Pilots say Delta is turning outside only because it fears running behind on internal cost-cutting goals. "We're not at an impasse, we're not at a stopping point, we're not at a face-off," says Cameron Foster, communications chairman for Delta's Air Line Pilots Assn. The pilots say they'll cut pay but want stock and a board seat in return. So far, Allen isn't offering either.EDITED BY KEITH H. HAMMONDS By David Greising