Delta workers handed 10 percent pay cut

Delta Air Lines Inc. Tuesday said it will reduce executive and employee pay by 10 percent starting in January and its CEO will go unpaid for the rest of the year as it tries to cut costs to avert bankruptcy.

Separately, Delta pilots Tuesday ratified an agreement that will allow the carrier to use retired pilots if staffing levels fall dangerously low.

Chief Executive Gerald Grinstein, in a memo to employees, said Delta also will increase the shared cost of employee health care and offer two voluntary exit packages to employees.

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Grinstein said the changes, in addition to the $1 billion in annual savings the company is seeking from pilots, are essential to Delta's survival.

"We have a small window of opportunity available to us to avoid Chapter 11 that some other carriers do not have," he said. "It is in everyone's best interest that we protect Delta's future by taking these steps together now."

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In exchange for use of the retired pilots on a contract basis, Delta has assured the union it will not file notice to cancel the pilots' pension plan before Feb. 1, even if the company files for bankruptcy before that date.

Waves of Delta pilots recently have taken early retirement, raising concerns a decline in staffing levels could require the carrier to ground a portion of its fleet.