At the moment we’re seeing pilots at most major US airlines trying to negotiate new contracts. They didn’t have much leverage to negotiate during the first two years of the pandemic, and with pilots now being in such high demand, this is obviously a great time to try to get a new contract.
Back in October 2022, Alaska Airlines became the first major US airline where pilots ratified a new contract. In December 2022, Delta Air Lines pilots reached a new agreement in principle with its 15,000 pilots. That has now been formally approved, and that has implications for the airline and for the industry overall.
In this post:
The basics of Delta’s new contract for pilots
Delta pilots have officially ratified a new contract, with 78% of pilots voting in favor of it. With this contract, we’ll see pilots at the Atlanta-based airline getting a huge pay bump. This new contract is worth $7.2 billion in value over the course of four years.
This new contract includes significant pay increases, both retroactively and going forward:
- Pilots will immediately receive an 18% pay increase, as of the day the contract is signed
- Pilots will then receive a 5% pay increase one year after that
- Pilots will then receive two 4% pay increases in the two years that follow
- Pilots will receive a one-time payment of 4% of 2020 and 2021 pay, plus a 14% payment of 2022 pay
- In the event that American or United negotiate a contract with better pay, Delta will get that pay matched, plus 1%
On top of that, pilots will get quality-of-life improvements, which will make up roughly one-quarter of the value of the overall agreement. This includes things like 10 weeks of paid maternity leave, two weeks of paid paternal leave, significantly improved crew meals, improved health insurance, and more. Interestingly this contract also includes a provision that “establishes medical freedom protections.” Oh my…
While this is an expensive contract, it’s good to see that these negotiations are now behind the carrier. In October 2022, Delta pilots voted to authorized a strike — 96% of pilots cast votes, and 99% of those pilots voted in favor of authorizing a strike.
Admittedly this was more about sending a message to management than anything else, since authorizing a strike is only the first of many steps to a strike actually happening. We haven’t seen a strike among pilots at a US airline for more than 15 years.
How much will Delta pilots be paid with this new contract?
I’ve written in the past about how much airline pilots are paid, and the general math that goes into that. Airline Pilot Central publishes pay rates of all the major airlines, including Delta.
Delta first officer pay ranges from $92 to $242 per hour, while Delta captain pay ranges from $238 to $334 per hour. You can generally just add three zeroes to the end of that to roughly figure out annual pay, though with Delta it’s usually even a bit higher than that, thanks to profit sharing. With this contract now being ratified, Delta pilots will be looking at pay raises of 34% over the next four years.
In other words, Delta’s most senior captains will be earning roughly $440 per hour, or around $440K per year (and probably even more than that).
With American and United both currently negotiating contracts, you can bet that pilots at both airlines will be looking to Delta as a benchmark. For that matter, even with Delta pilots having approved this new contract, they’ll be looking at the contracts of American and United, as they can potentially get those contracts matched, plus 1%.
Also keep in mind that even though Alaska has finalized its contract, there’s a provision that if pilots at other airlines get a better contract, Alaska will match it. Alaska pilots are entitled to the average of the top of the pay scales of American, Delta, JetBlue, Southwest, and United, so these pilots could be looking at some additional raises as well.
Bottom line
Delta management and the union representing pilots have agreed to a new contract. The contract is worth $7.2 billion to pilots over the next four years, and includes an immediate 18% pay raise, a further 13% in pay raises in the next three years, retroactive pay raises, and quality of life improvements.
You can bet that both executives and unions at American and United are watching this closely, because it probably gives them a sense of what they can expect to pay.
I’m happy for Delta pilots, though there’s also no denying that labor costs in the airline industry (and so many other industries) are increasing considerably, further leading to inflation. With most airlines introducing lucrative new contracts for employees, that will be reflected in our ticket costs in the long run. I guess that’s how the cycle of inflation works, though.
What do you make of Delta’s new pilot agreement?
It is crazy, airline ticket prices will soar. They are already 20% to 40%more than before the pandemic. Also I wish I had 2 1/2 months off a year. I get 2 weeks off a year at my place of work and I am 68 years old and have worked my whole life. Very disappointing this greed.We cannot afford this as a country. Airline travel will only be fore the rich. Thanks Delta Pilots. Delta has the highest priced tickets in the industry and will only get higher.
American Airlines will have to wake up as its salary package is no where Delta.Leads to Top employees ie Pilots who basically run the airline industry feeling short changed.Cannot compare baggage handler to Pilot and perks can’t be same either.It is like ranks in military.That’s the way it got to run for efficiency,effectiveness and profit.
Ridiculous to have labor cartels for skilled professionals like pilots. Although I agree that pilots have considerable skill and demanding work, labor cartel inflates compensation above market rates. There are plenty of people who can take the demanding training. The pilot shortage of today can easily be a glut in the future.
My understanding of the Delta contract is about $590,000 (total compensation) for the most senior captains of widebodies and $475,000 for narrow body...
Ridiculous to have labor cartels for skilled professionals like pilots. Although I agree that pilots have considerable skill and demanding work, labor cartel inflates compensation above market rates. There are plenty of people who can take the demanding training. The pilot shortage of today can easily be a glut in the future.
My understanding of the Delta contract is about $590,000 (total compensation) for the most senior captains of widebodies and $475,000 for narrow body planes. Absurd compensation. The reason for this ridiculous level of compensation is the labor cartel. Even though Congress may not authorize a strike, pilots can take job actions to cause. Airline executives know the possible chaos. First, the pilots demanded outrageous compensation. Then others (flight attendants, gate agents, baggage handlers, mechanics, ...) will demand. Outrageous ticket prices are coming. Then airline bankruptcies.
Try flying a commercial airliner? And its a labor union not cartel so you must be over in Europe. Delta can afford these wages easily.
I’d just like to put on record my appreciation for Tim Dunn. Haters gonna hate, Tim. Stay strong my brother
That’s not how inflation works.
What is it like to have Tim Dunn living in your head rent free?
It is sad, isn’t it? There are a few people that need a little help w their head.
Prince Harry is charging for people to watch his therapy sessions. Maybe a few here should watch
Nothing is quite as entertaining as Tim’s usual practice of creating fake usernames to back himself up, “Jan”.
Prince Harry knows he needs therapy, I’m not sure tim has accepted that just yet, despite his many personalities.
@MaxPower I mostly post on Matthew’s blog, and there you’d probably find out real quick that I’m not who you claim I am. But keep being creepy, being obsessed with another dude on the internet is multitudes weirder than being obsessed with an airline. just saying.
if you've ever seen his multi-paragraph rants on me for simply countering his made up data with actual facts (aka. He gets called out for being wrong)... you'd know who the crazily obsessed one is.
But, feel free to get registered with your name on this site. It's Tim's mark of a true "man" as I think he put it once. But, just do it for Tim. I really don't care.
Enjoy your day
Good for them! Of course it will cost us (the consumer) more to travel, but hey, what's new with the rising cost of living these days? On a recent trip on AA from MEX-PHX in business class, we were at least served a decent meal (Very tasty salmon! Yum!), which surprised me very much!!! But on our return trip from DFW-BJX on AA in business class, we were served nothing more than a crap packaged...
Good for them! Of course it will cost us (the consumer) more to travel, but hey, what's new with the rising cost of living these days? On a recent trip on AA from MEX-PHX in business class, we were at least served a decent meal (Very tasty salmon! Yum!), which surprised me very much!!! But on our return trip from DFW-BJX on AA in business class, we were served nothing more than a crap packaged "treat" full of toxic seed oils, but on the other hand the pilots were served a meal that looked very tasty! Hmmm? I guess business class passengers on a 2 1/2 hr (shorter flight) are just not worth anything to AA?
The bigger part of this agreement is that D-ALPA said that 48% of Delta pilots will get BIGGER increases than all of the above because Delta is banding pay between aircraft types so that all of Delta's widebodies larger than the 767-300ER will be paid the same rate (ie 767-400, A330 (all types) and A350 pilots will make the same amount for the same seniority and seat) and there was pay banding for several of...
The bigger part of this agreement is that D-ALPA said that 48% of Delta pilots will get BIGGER increases than all of the above because Delta is banding pay between aircraft types so that all of Delta's widebodies larger than the 767-300ER will be paid the same rate (ie 767-400, A330 (all types) and A350 pilots will make the same amount for the same seniority and seat) and there was pay banding for several of Delta's narrowbody aircraft types as well.
Delta already has announced pay increases for its non-union employees on top of what it gave during covid, so nearly all Delta employees have increased their pay post-covid.
Delta has provided investor guidance that will lead to a significant charge due to the one-time payouts for pilots BUT Delta is still guiding to a higher level of profit margin than American, Southwest and United for the first quarter.
None of those airlines have settled contracts for near as many employees so their margins will suffer.
Delta is expected to begin a significant series of route announcements based on their new aircraft deliveries; they are also expected to finalize a large twin widebody between the A350-1000 and B787-10 with the larger A350 most likely.
Delta is, once again, leading and if other airline CEOs don't open their checkbooks pretty wide, this could be the summer of labor unrest at a number of airlines.
I knew we could count on you for that unique blend of insightful detail and sycophantic praise!
Let us know what part is factually wrong. That is all that matters
Let us know what part is factually wrong. That is all that matters
When someone refers to themself as "us" I do find it a bit odd, if not "sus" per se.
Tim Dunn referring to himself in the first person plural is the OMAAT comment content we didn't know we needed!
Us refers to the OMAAT readership. Truly. Get. A. Life.
Tim clicking refresh every 30 seconds on the comments section telling others to get a life. There's a good laugh for the rest of us...
When you have you last posted something on the topic and not me?
You should read what you write if you want to know the answer to your question. I’m replying to your usual off topic nonsense.
Also, check your syntax if you’re going to be commenting after a few drinks
About time workers other than CEO level in the airline industry get decent pay. In Australia at Qantas workers conditions have gone down and there is continuous outsourcing.
Whilst Alan Joyce and his executive team’s salary has gone up and up and up, all subsidized by the Australian government.
It's funny to imagine a scenario where they all negotiate the other's best pay rate plus 1% and pilots pay just rises in an infinite loop to infinity.
two weeks paid paternity leave? thats just sad. Did they have zero before?
‘Murcia!
I believe the answer is yes, that they had zero paternity leave before. This is incredibly common in the US outside of a few coastal states that have laws requiring it.
"though there’s also no denying that labor costs in the airline industry (and so many other industries) are increasing considerably, further leading to inflation."
Maybe, but let's not fall into the trap of blaming labor for anything cost related...... when these corporations are putting billions into stock manipulation, legalized political bribery (er, I mean "campaign donations"), naming rights, and 8-figure executive bonuses for people who do the minimum expectation of their position.
"though there’s also no denying that labor costs in the airline industry (and so many other industries) are increasing considerably, further leading to inflation."
Maybe, but let's not fall into the trap of blaming labor for anything cost related...... when these corporations are putting billions into stock manipulation, legalized political bribery (er, I mean "campaign donations"), naming rights, and 8-figure executive bonuses for people who do the minimum expectation of their position.
Good News not just for Delta pilots but pilots at other major US carriers. Strikes hurt all of us, not just the airline and it’s shareholders.
This agreement will likely be emulated by United and American.
And if they are not, DL will have one of the industry's highest cost structures.
High pay and high cost are not the same thing. Delta has had the lowest unit costs of the big 3 and that will return as Delta reinstates capacity this year
@Tim,
Your comment is a non sequitur. I wrote nothing about costs. My comment only had to do with the Delta pilots' CBA - no more, no less. Airline unions tend to "pattern bargain" - i.e., use competitors' contracts as the basis of negotiations on theirs. When there were more and weaker airlines, pattern bargaining tended to create severe problems for the smaller legacies. But it makes more sense now that the industry is far more consolidated.
Yes, that's typically how these things go, which is why Delta had an incentive to get to the finish line first, knowing that it's unlikely they pay structure they negotiated will exceed market once the others catch up.
I wonder how it works contractually if all the new contracts have provisions to be 1% better than the others. Is it just based on the original contract amount? Otherwise, they'd all be chasing each other upward in a never-ended spiral.
well if a contract is good for 5 years, presumably that 1% will only kick in every 5 years
This is just insane. When will these US airlines pay back the treasury for their covid bailouts?
Never. That's the beauty of the political donations part.
They effectively are by increasing pay they're increasing payroll taxes. The bailout funds they received were to keep employees on the payroll that they didn't need at the time.
is tim dunn okay? concerning he hasn't showed up yet.
It's almost as if airlines think they will make up the money blowout by charging more to customers who just saw their mortgage payment skyrocket. Good thing we have responsible government that only spends on totally necessary things and doesn't fuel the inflation spiral by borrowing more.
I'm sure there are many issues at play, but until Tim Dunn tells us how this is a groundbreakingly amazing move by Delta, I'm reserving judgement.
It's hard to tell who's more creepily obsessed: him with deifying Delta, or you with mentioning him.
5 minutes and no Tim Dunn post?!
Roberto's typing speed > mine.
Posted 17 minutes ago, means he has been typing for that long. Buckle up, its going to be long
He's probably busy changing his underwear. Or maybe even buying for this one!