Last Wednesday, Delta Air Lines and its pilots’ union - the Air Line Pilots Association (ALPA) -agreed to an industry leading 34% salary rise for Delta pilots, in a move that at once secures Delta’s pilot security and sets an entirely new standard of acceptable pay that is likely to have other US airlines scrambling for improved contracts to offer their own pilots.
COVID-19 triggered an unprecedented contraction of the flight industry, forcing even the biggest airlines to economize through strategies that included offering early retirement packages to pilots. The post-COVID travel boom has subsequently caused a pilot shortage across the U.S. and global airline industry. An Oxford Economics study has estimated that “globally, there were 2.3 million fewer people working in aviation by September 2021 compared with the beginning of the pandemic”. Pilots’ unions have responded to this shortage, asking for better pay, better perks and better conditions.
Delta faced the same difficulties as other major U.S. airlines last year. The last time a pre-COVID contract had been agreed was in 2016. Renegotiation started in April 2019 and mediation had begun by February 2020, but the pandemic postponed contract conclusion. Renegotiations resumed in January last year but by that time the metrics of an acceptable contract had shifted, largely due to increased demand for pilots, greater pressures and longer hours demanded of pilots, and contextual factors such as inflation.
In light of this, Delta reopened negotiations with ALPA in November 2022 and in February the new contract was put to a vote, with 78% of pilots casting their ballots in favor of the upgraded terms. Under the new contract, Delta pilots can expect an 18% raise on date of signing, then 5% next year, 4% in 2025 and a further 4% in 2026.
ALPA estimates that the deal will lead to $7 billion extra spent by Delta on its 15,000 pilots. The deal also includes policy changes that indicate Delta’s commitment to improving pilots’ quality of life, vacations and other long-term benefits. ALPA official Darren Hartmann has described the contract as “industry-leading”.
Delta Chief of Operations John Laughter was similarly optimistic, declaring that the airline “set out to deliver the industry’s best pilot contract to the industry’s best pilots, one that keeps us as a top destination for U.S. aviation careers, and this contract is a reflection of that unwavering commitment.”
Smaller airlines had already taken note of Delta’s upgraded contract prior to the agreement being signed. In January, Spirit Airlines approved a two-year contract with pilots representing a 34% pay boost and in October Alaska Airlines declared a deal increasing pay by up to 23%.
Larger airlines, however, are struggling to accept that, with the return of air travel, more, better paid pilots are the answer to growing travel demand. Other than Delta, the remaining three of the ‘Big Four’ airlines - American, United, Southwest - have all struggled to address pilots’ demands.
In June 2022, American Airlines agreed to a salary hike of 50%, though this deal is temporary, based on hourly rates due to overworking pilots, and only applies to the regional carriers that AA subcontracts. American also negotiated a 19% increase with UK staff at Heathrow Airport but negotiations with domestic employees have stalled after the American Airlines Pilots Union rejected a pay rise identical to that of Heathrow staff in November 2022.
Southwest, meanwhile, in a drastic effort to attract new pilots, is halving its mandatory minimum hours experience from the industry standard of 1,000 hours to just 500, This follows on from a holiday disaster in which the airline cancelled 16,700 flights cancelled, lost around $220 million, and was hauled in front of the Senate for questioning.
United Airlines was initially more amenable to its pilots, with CEO Scott Kirby telling Reuters in December that the Delta deal was a helpful benchmark that would allow United to “get deals done essentially on the same terms and […]move forward”. However the airline now appears to have gone back on its word, offering pilots only a 15% pay rise over 18 months – far below what other airlines are offering. The proposal was rejected by United pilots on Tuesday, with ALPA criticizing the airline’s “wait-and-see approach to negotiations”.
Since December, 100 regional jets have been grounded by United Airlines Holdings Inc. - a clear symptom of underpaid, overworked staff who have yet to be presented with a respectable contract improvement.
Rather than offering current pilots the minimum, or halving the experience threshold for future pilots, Delta has accepted that salaries must increase. Nor is the pilots’ contract the only change in Delta’s post-COVID approach to its employees. In February, a company-wide pay increase of 5% was announced for ground and flight attendant employees worldwide. This was in addition to a 4% increase agreed in May 2022, meaning employees salaries have increased by 9% across the board in 10 months. Delta CEO Ed Bastian sent a memo to employees in February after the 5% increase had been agreed, describing it as a “well-earned increase” that was “a direct result of your efforts”.
Since January 2022, Delta has been seeking to employ between 100 and 200 pilots monthly. In the earnings call in which that figure was announced, it was also noted that Delta had not experienced any shortage of pilots of applicants at its mainline operations level. Delta’s mainline has also not exited any cities.
The upgraded pilots’ contract took effect on Thursday, March 2. With its industry-leading pay increase, it is safe to assume that Delta will be able to hire close to its upper monthly goal for pilots. What proportion of Delta’s recruits will be pilots defecting from dissatisfactory pay at other U.S. airlines will serve as a clear indicator of how urgently United, American and Southwest will need to amend their policies regarding pilots and pay if they are to compete with Delta’s quality of service and volume of flights.