Opinion ID: 771985
Heading Depth: 3
Heading Rank: 3

Heading: Pay Scale Disparity

Text: 20 Due to Pan Am's extreme financial distress when the APA deal was struck most Pan Am employees were earning significantly less than their Delta counterparts, and the pilots were no exception. When Delta offered employment to the Pan Am pilots, it did so at their pre-existing Pan Am pay rates with scheduled incremental increases to parity with Delta's pay scale spread out over three years. Delta's pilot pension benefits were calculated based upon the pilot's final average earnings (defined as the one-year average of the best 36 months' earnings over the final ten years of employment). Thus, by not immediately jumping all Pan Am employees up to the Delta pay scale, the Pan Am pilots who retired within six years of the closure of the transaction would receive a reduced pension benefit vis-a-vis a similarly situated Delta pilot. 21 Eventually, 774 Pan Am pilots accepted Delta's offer of employment. Because Delta offered positions according to Pan Am's seniority list, Delta ended up hiring a very senior group of pilots. Approximately 95% of the Pan Am pilots hired by Delta were age 40 or older and 70% were age 50 or older. The acquisition of the Shuttle assets closed on September 1, 1991, the remainder of the APA closed on November 1, 1991, and Delta accomplished its turnkey objectives. Pan Am, on the other hand, ceased all operations in December 1991, and one of the most venerable names in American aviation was liquidated shortly thereafter, leaving thousands of Pan Am pilots and employees not hired by Delta jobless.