WASHINGTON — The head of an arbitration panel on Thursday ordered the management and pilots union at Delta Air Lines Inc. to immediately begin negotiating for an agreement to avoid a collapse of the 77-year-old airline.
In a strikingly impassioned statement at the end of nine days of hearings before the three-person panel, its chairman Richard Bloch chastised both sides and warned them that “time is very much of the essence and failure … is not an option.”
The pilots union has promised to strike if Delta, which is operating under bankruptcy protection, is allowed to void its contract and impose up to $325 million in pay cuts. Company executives say that a strike would spell the demise of the nation’s third-largest airline.
“Make no mistake: you both are responsible for this proceeding,” Bloch said in the hotel meeting room where officials of Delta and the pilots union, and their attorneys, sat on opposite sides. If the two sides fail to reach accord and the panel is forced to rule on whether Delta can toss out its contract with the pilots, he said, “This will be an abandonment of responsibility that will, and should, haunt all of you.”
“This is a shameful exercise by two groups who it appears have bargained successfully in fat times; but in hard times, the talk turns to nuclear options …,” Bloch said. “You need to begin today, tonight … you need to get down to this privately now.”
Each side, he said, “has within its power the ability to destroy this company.”
They didn’t plan to sit down immediately, but Delta’s chief financial officer, Edward Bastian, said he expected negotiations to begin in a day or two.
“We’re hoping to be able to get back to the table,” Bastian told reporters after the hearing. “I would hope in the next few days we could start.”
“We need to get this done. … But it won’t be easy,” he said.
The head of Delta’s pilots union, Lee Moak, said: “The ball is in the company’s court. It takes two parties to negotiate and they haven’t negotiated to this point. We’ll see if the panel’s words can bring them to the table willing to negotiate in good faith.”
Unlike a court, the arbitration panel does not have the legal authority to order the two parties to negotiate, but Bloch said they should consider his statement — agreed upon by the entire panel — “an interim order of this arbitration panel.”
The two sides had signaled earlier a hardening of their positions. Bastian rejected in his testimony Thursday the union’s notion that the difference between the two sides’ views — pegged at $165 million — is marginal and should be overcome.
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