[Note: This article is currently being revised...] The airline industry is still experiencing the worst financial crisis in its history. United Airlines and US Airways already have sought protection under Chapter 11 of the bankruptcy code. American Airlines narrowly escaped bankruptcy and is still in a vulnerable financial position. Many external and internal factors exist that could also cause Delta to seek protection under the bankruptcy code.

If such a situation should occur, the court would oversee a financial restructuring plan that would be put forward by the company while management continues operating the airline. The court’s major goal in this process would be to see that Delta’s costs are reduced to levels commensurate with projected income so that the airline will continue flying as a viable enterprise while simultaneously attempting to protect the economic interests of the company’s creditors.

Although the exact effect of the bankruptcy filing on employees, creditors and shareholders is unknown, you can expect there will be significant reductions to the pay, quality of working conditions and benefits of active employees. Some of the current retiree benefits also could be reduced or eliminated. Retirement benefits (including both qualified and nonqualified portions), medical benefits, retiree life insurance and travel benefits will be at risk.

Delta’s major creditors will be represented aggressively during any bankruptcy process. ALPA will represent the active pilots. Although retiree benefits are defined in the Pilot Working Agreement, ALPA may refrain from representing Delta Pilots’ Pension Preservation Organization retired pilots in bankruptcy proceedings. It appears that such was the case when US Airways filed under Chapter 11.

Modification of a collectively bargained agreement, such as the Pilot Working Agreement, is processed under Section 1113 of the bankruptcy code; modification of retiree benefits, under Section 1114. It would therefore be prudent for retired pilots to have legal representation in Section 1113 and 1114 proceedings.

Several hundred retired Delta pilots have determined it would be important to have an organization in place to represent our interests if bankruptcy should occur. To facilitate this effort we have formed the Delta Pilots’ Pension Preservation Organization (DP3), which we intend to register as a not–for–profit corporation in the State of Georgia. DP3 will monitor the situation at Delta and keep abreast of developments that could possibility have an adverse affect on retirement benefits.

The level of participation and financial support by the retired pilots and their survivors will determine the effectiveness of DP3. None of the Trustees of DP3 will receive any compensation for their involvement in this effort beyond reimbursement of reasonable out-of-pocket expenses.