Delta’s 34% pay increase offer setting new standard for industry?

Southwest Airlines pilots picketed for better work conditions in June outside Dallas Love Field.

Kyle Arnold

The Dallas Morning News

A tentative contract deal between Delta Air Lines and union pilots sets a new standard in the increasingly expensive battle for the travel industry’s most coveted employees.

On Friday, the negotiating committee with Air Line Pilots Association representing Delta’s 14,000-plus aviators came to a deal with the company that would give 34% pay increases over the four-year life of the deal. It still needs approval from union leaders and pilots.

The deal would cost Delta about $7.8 billion in added expense over the four years.

The four biggest airlines are all negotiating new deals with pilots and both unions and airlines are closely watching what peers offer. There is hope among airline executives and union leaders that the first accepted contract will trigger other deals across the industry.

“Without question, bargaining progress by one airline will stimulate other ongoing labor negotiations in our industry,” the union for American Airlines pilots, the Allied Pilots Association, said in a message to members Saturday.

Delta’s tentative agreement reportedly includes a “snap-up” to pay its pilots 1% better than pilots at American or United under new deals those companies sign. There are also bonuses for pay going back to 2020 and terms for more flexible work schedules, the biggest sticking point for pilots.

Delta’s offer bests the 14.7% pay bump over 18 months that Chicago-based United Airlines offered to pilots and the 20% over two years that Fort Worth-based American offered its pilot group. Both of those deals were rejected and American Airlines’ contract agreement never made it past union leaders.

Even after a calm Thanksgiving week for airlines, negotiations with pilot groups remain tense heading into the holidays. Pilots at Delta have threatened to strike and pilots at Dallas-based Southwest Airlines are planning an informational picket in New York for the company’s annual investor day Wednesday. United pilots are picketing in Houston Wednesday as well during that company’s board of directors meeting.

Southwest is now the only major airline to have failed to come to even a tentative agreement with its pilots.

“We’re hoping this drives Southwest to realize some urgency to getting this wrapped up,” said Casey Murray, president of the Southwest Airlines Pilots Association.

Murray said scheduling issues are still the toughest point in negotiations. Pilots across the industry have been frustrated by higher rates of cancellations and delays over the last 18 months that they say are making their work schedules unpredictable.

A shortage of pilots forced airlines to reduce schedules over the last six months, which has helped alleviate disruptions but at a cost of fewer flights available for passengers.

At both American and Southwest, pilots want more flexibility to dictate their own schedules and incentives to pick up more flying, while airlines want to keep enough pilots on reserve to maintain a sufficient buffer when bad weather and other disruptions happen.

Delta’s deal includes 50% to 100% “reroute” bonus pay for pilots whose trips are changed, Murray said.

“We’ve chosen to approach it with a scalpel trying to fix the problem rather than a hammer,” Murray said. “We have a lot more options being a point-to-point network.”

Robert Isom, American’s CEO, said the company has included “quality of life improvements” in the contract proposal that its pilot union rejected in November.

“We reached an agreement in principle with the negotiating committee from the APA,” Isom said at the Skift Aviation Forum in November in Dallas. “So that gives me a lot of hope that we’ve got to be headed down the right track.”

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