Delta Air Lines' [DALQ] regional partners may get the opportunity to fly slightly larger regional jets - and more of them.

Contained within Delta's request to its pilots to accept a 19.5 percent wage cut, the mainline carrier also wants greater flexibility to fly more regional jets and code-share more flights on SkyTeam partners, especially Northwest Airlines [NWACQ] and Continental Airlines [CAL].

On Nov. 1, Delta petitioned its bankruptcy judge to void its current contract with the Air Line Pilots Association (ALPA) if the two sides do not reach a new accord soon. The carrier would prefer to impose an offer it made on Sept. 12 - the day before it filed for bankruptcy. A court hearing on that petition will be held on Nov. 16. The two sides have met several times to discuss the proposal since it was first presented.

At Delta, only the pilots are unionized. New wage cuts took effect on Nov. 1 for Delta's non-unionized employees.

On Oct. 12, Northwest filed a similar petition with its bankruptcy judge - in the same New York courthouse - to void all of its union contracts unless a negotiated settlement can be reached. A hearing on the Northwest petition also will be held on Nov. 16.

United Airlines [UALAQ] used a similar tactic to extract salary concessions from its labor groups. Its flight attendants and mechanics refused to accept the company's last offer until just hours before a judge was to impose new pay scales. Both unions threatened to strike if the judge voided their contracts. While the labor laws that govern airlines practically preclude strikes, the unions insist that the area is a gray one because of the bankruptcy law.

"Each [scope] restriction was nominally intended to preserve or enhance some aspect of 'job security.' It has now become clear that the scope clause substantially inhibits Delta's ability to respond promptly to the needs of the marketplace," said Geraldine Carolan, Delta's vice president of labor relations.

Delta has proposed removing some restrictions so its Delta Connection partners can fly 200 regional jets with up to 79 seats. The scope clause currently caps the flying of aircraft up to 70 seats and no more than 150 of them. "This modest change will permit Delta to have a marketing presence in additional markets in which actual flight operations by Delta cannot be economically justified," Carolan wrote in a court filing.

Two Delta Connection carriers fly both Bombardier [BBD] and Embraer [ERJ] aircraft at the 70-seat mark. Atlantic Southeast Airlines (ASA), now a unit of SkyWest [SKYW], flies 35 CRJ 700s for Delta. In September, Republic Airways' [RJET] Shuttle America unit began flying the first of 16 Embraer 170s committed to Delta.

The 79-seat cap would enable Delta Connection partners to fly the 75-seat CRJ 705 and the 78-seat Embraer 175. Air Canada [ACE] is the only carrier currently flying either of these planes.

At the moment, Delta has not opened up 90-seat flying to the regionals. If Delta were to fly the new 100-seat Embraer 190, for example, its mainline pilots would fly it.

Northwest is following a parallel path. Its regional code-share partners would get rights to fly RJs capable of carrying 76 passengers (RAN, Oct. 17, p. 2). It however, would create a new in-house regional carrier - dubbed Newco for now - to fly the Embraer 190. It is offering its mainline pilots a guarantee to fly aircraft in the 77- to 100-seat class.

In language similar to Northwest's, Delta is asking the court for the flexibility to place its "DL" code on more Northwest and Continental flights without seeking ALPA's permission.

"Under the scope clause, Delta had to secure ALPA's agreement and approval to enter into each such code-share agreement," Carolan said. "While ALPA's agreement was eventually obtained, it was always at the price of both extended discussions and delay and concessions by Delta on some other aspect of its relationship with ALPA."

>>Contact: Bankruptcy Court for the Southern District of New York, Docket #05-17930.<<