ATLANTA (dpa-AFX) - Southwest Airlines (LUV) confirmed that the airline, together with its subsidiary, AirTran Airways, Inc., has reached a tentative agreement with Delta Air Lines Inc. (DAL), and Boeing Capital Corp., to sublease all 88 of its Boeing 717 aircraft to Delta.
The tentative agreement between Southwest and Delta would transition the 717s over three years starting in the second half of 2013 with completion in 2015.
The plan calls for the transition of approximately three 717 aircraft per month beginning in mid-2013. The Company currently plans to keep the total fleet count relatively flat as the 717s transition to Delta.
Southwest said its plans to integrate current AirTran Employees into the Southwest operation over the next several years remain unchanged. All Pilots would train and transition directly into the airline's 737 fleet as the 717s are reduced.
Southwest noted that it would replace AirTran's 717 flying with 737 aircraft, and would work with individual airports on facilities transition timelines. Southwest affirmed its current plans to maintain service to all previously announced airports.
In a separate press release, Delta Air Lines said that it will begin taking delivery of Boeing 717 aircraft as early as 2013 upon ratification of a new tentative agreement covering Delta's more than 12,000 pilots.
The tentative agreement was approved on May 21 by the Master Executive Council or MEC of the Delta Air Line Pilots Association or ALPA. The tentative agreement now will be presented to pilots for review and ratification through June 30.
The tentative agreement also provides Delta with additional flexibility to acquire up to 70 larger two-class, 76-seat regional jets as the Boeing 717 aircraft are delivered to Delta. Delta currently operates 255 larger two-class regional jets; the fleet will be increased to 325 aircraft.
In addition, the tentative agreement will provide for productivity enhancements as well as improvements to the total compensation package for Delta pilots, including increases to base pay. The agreement also provides for a modification of the profit sharing program for pilots so that it pays 10 percent of profits, compared with 15 percent today, on the first $2.5 billion of profits effective January 1, 2013. The plan will continue to pay 20 percent of profits above $2.5 billion.
Delta Air noted that a voluntary early retirement option recently offered to its other employee groups also will be available to Delta pilots upon ratification of the tentative agreement.
Delta Air stated that Pilots have approximately five weeks to review and ratify the tentative agreement. If approved by the June 30 deadline, the agreement would take effect July 1, 2012. The agreement becomes amendable December 31, 2015.
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© 2012 AFX News
