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Published: Thursday, 4/24/2003

Bailout at Delta

When a publicly traded company reveals that it has lavished some fabulously expensive new perk on its executives, the justification usually is that the expense is necessary to keep the management team intact.

And that is how Delta Air Lines is spinning the disturbing news that it set up special retirement trusts last year to protect the pensions of 33 upper echelon employees.

What that means is that the same inept individuals who have led Delta to some $3 billion in losses since 2000 will keep their “supersized” retirement benefits, even as the company seeks to avoid bankruptcy by cutting wages and pensions of rank and file employees.

To be fair, airlines in general have suffered financially since the 9/11 terrorist hijackings. But the industry was in serious trouble of its own making even before 9/11, which is why Congress' willingness to repeatedly bail out the air carriers at taxpayer expense is not only distasteful but fundamentally wrong.

Delta got about $600 million when Congress hurriedly approved the first bailout package shortly after 9/11. And it stands to receive $400 million more from a second allotment signed into law by President Bush last week. At the same time, Delta is notorious for overpaying its chairman and CEO, Leo F. Mullin, whose total compensation last year was $13 million.

The airline lost $1.3 billion last year and another $466 million in the first quarter of 2003. That would certainly seem to suggest that the company's financial distress will continue, government subsidy or no.

Put another way, taxpayer money is doing little in the way of rescue work at Delta. Except, that is, to ensure that overpaid executives - its vaunted “management team” - will get inflated pensions when they bail out of this airborne gravy train. Talk about your basic golden parachute.

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