PILOTS PLAYING BALL, SIGN DELTA PACT

The union representing Delta Air Lines' pilots announced its membership had widely approved an agreement that cuts the carrier's labor costs by $1 billion annually. Seventy-nine percent of voting pilots approved the five-year deal, which takes affect from Dec. 1 and may help Delta avoid bankruptcy. It marks the latest concession by a unionized pilot group as major network airlines around the industry slash costs and attempt to pull out of a financial state of panic.

"They chose the lesser of two evils," said Capt. John Malone, chairman of the Delta Master Executive Council of the Air Line Pilots Association. "We have bought Delta time to continue restructuring outside of the courts. It is now up to management to successfully execute a viable business plan."

The deal includes a 32.5 percent wage reduction, work rules changes and other cost savings. It also swaps the existing pension plan for a cheaper one and increases the number of 70-seat regional jets that can be flown by Delta's regional affiliates. In exchange, pilots will receive 30 million stock options.

A week ago, pilots at Northwest Airlines, also represented by ALPA, overpoweringly approved a new deal that would generate $300 million in cost savings and additional revenue for the carrier. Northwest must reorganize a revolving debt facility of nearly $1 billion before the new pilots contract takes affect.

As labor rates are being redefined in the market, other airlines are expected to ask unions for concessions that would bring their contracts in line with new standards. Pilot groups at American Airlines and Continental Airlines, for example, have indicated a willingness to negotiate new contracts and examine the ramifications of ditching current pension plans. Pilots at Delta and US Airways already have agreed to switch from a defined benefit pension plan to a defined contribution plan. United Airlines' management has proposed a similar measure .