Executive Briefings

Delta Pilots Ratify New Contract Featuring 30 Percent Raise

Half a decade after American Airlines filed for bankruptcy and workers were forced to take massive cuts to keep their positions, many U.S.-based airlines are posting record profits. The turn in fortunes is now turning up the heat on carriers to heed the demands of workers seeking compensatory treatment after years of sacrifice. One by one, carriers seem to be responding.

The latest example is Delta, which has offered pilots a cumulative 30 percent raise by January 2019. The new contract maintains their profit-sharing plan, which pays out a proportionate 10 percent of pretax income up to $2.5bn, and 20 percent on any profit over that amount. On Dec. 1, 82 percent of pilots voted in favor of the new agreement, with 95 percent of the eligible voters casting ballots.

While Delta slashed profit-sharing payouts for non-union employees, the airline announced that it has raised pay for many of its workers by 18.5 percent since April 2015, and plans to tack on another 6 percent increase in April 2017.

Industry observers said that the current run may not last long, raising concerns that carriers are “recklessly raising their costs,” per the Wall Street Journal. Unions’ strategies of agitating for new contracts before the market weakens substantiate this outlook. In recent weeks, ABX Air pilots and UPS mechanics unions have both taken legal action, which their respective management played off as being negotiation tactics.

The Allied Pilots Association, which represents 15,000 pilots at American Airlines, has also started pushing for early renegotiation of their 2015 contract, which passed by a smaller 65.5 percent margin.

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The latest example is Delta, which has offered pilots a cumulative 30 percent raise by January 2019. The new contract maintains their profit-sharing plan, which pays out a proportionate 10 percent of pretax income up to $2.5bn, and 20 percent on any profit over that amount. On Dec. 1, 82 percent of pilots voted in favor of the new agreement, with 95 percent of the eligible voters casting ballots.

While Delta slashed profit-sharing payouts for non-union employees, the airline announced that it has raised pay for many of its workers by 18.5 percent since April 2015, and plans to tack on another 6 percent increase in April 2017.

Industry observers said that the current run may not last long, raising concerns that carriers are “recklessly raising their costs,” per the Wall Street Journal. Unions’ strategies of agitating for new contracts before the market weakens substantiate this outlook. In recent weeks, ABX Air pilots and UPS mechanics unions have both taken legal action, which their respective management played off as being negotiation tactics.

The Allied Pilots Association, which represents 15,000 pilots at American Airlines, has also started pushing for early renegotiation of their 2015 contract, which passed by a smaller 65.5 percent margin.

Read Full Article