Delta's pilot deal turns up the heat on rival airlines' union negotiations

Delta Air Lines' industry-changing pilot contract that offers $7b in higher pay and benefits is putting pressure on rival carriers to hand out similar deals ahead of a busy summer travel season. Any proposal that falls short of Delta's deal will likely have no takers among the unions, but airline executives say even matching that contract could balloon operating costs at a time when a worsening economy has clouded travel outlook. The Delta deal, working conditions and other topics will be discussed at a global conference of pilots in Montreal through Sunday. "Delta is out there as a marker," American Airlines CFO Devon May told Reuters. "That's what we are looking towards as we are working with our pilots union to get a deal done." The Fort Worth, Texas-based carrier has estimated that matching Delta's offer will cost it about $8b over four years. American Airlines, United Airlines and Southwest Airlines are all in the middle of contract negotiations with their pilots. Southwest and United have not quantified the potential impact publicly, but both expect a marked increase in non-fuel operating costs. Jason Ambrosi, head of the Air Line Pilots Association (ALPA) and an architect of Delta's deal, told Reuters the big increases in pay rates and benefits will not break airlines. They serve as a way for pilots to make up for concessions made during earlier crises like after Sept. 11, he said. "Guess what? That's what pilots are worth," Ambrosi said. "I'm not going to make any excuses for why we got the deal we got." But some industry officials say hefty raises for pilots will likely spark demands for similar deals from flight attendants and other workers, potentially resulting in millions of dollars in additional costs.<br/>