As much as we might rag on Delta for its SkyMiles program and largely outdated fleet, you’ve gotta give the airline credit for how much it rewards employees for their shared success.
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Delta employees get 10.4% profit sharing for 2023
Since 2007, Delta has had the most generous profit sharing program in the airline industry. On Valentine’s Day every year, employees get their profit sharing check, reflecting the carrier’s results for the year.
For 2023, Delta employees have been rewarded with 10.4% of their eligible earnings, representing more than one month of pay. For some frontline employees, this might amount to a few thousand dollars, while for some pilots, it might amount to tens of thousands of dollars.
With this latest profit sharing payment, Delta’s profit sharing scheme since 2007 has now paid out $11 billion. Delta’s profit sharing this year is greater than the pool of all other US airlines combined. Over the past 10 years, the airline has shared over $1 billion in profits annually seven times. This is no small chunk of change — Delta’s total profits for 2023 were $4.6 billion, so this year’s payment is equal to roughly 30% of the profits.
It’s also interesting to see how that $1.4 billion is being distributed geographically, as obviously this has an impact on local economies. The states with the biggest profit sharing are Georgia ($595 million), New York ($185 million), Michigan ($110 million), California ($86 million), Washington ($77 million), and Utah ($76 million). That’s not surprising, given the location of Delta hubs. It is interesting just how big Delta’s presence is in Georgia, as nearly half of the profit sharing is in that state.
Here’s how Delta CEO Ed Bastian describes the latest profit sharing payments:
“Rewarding our people is fundamental to who we are at Delta. It’s always my No. 1 priority to take care of the Delta team, and today is a prime opportunity to recognize their dedication and efforts in 2023. This year’s $1.4 billion payout along with our global annual celebrations represent just one of the ways we’re able to demonstrate our gratitude and love for a well-deserving team.”
This profit sharing is part of Delta’s recipe for success
Delta has long had a superior corporate culture to American and United, and the profit sharing scheme has been a large part of that success. Employees are a lot more invested in the success of the airline than at other carriers.
Now, I do think Delta has lost some of its edge when it comes to service since the start of the pandemic, given the percent of Delta’s workforce that’s new. But still, the airline is a cut above the rest when it comes to taking care of and showing appreciation for customers.
Delta’s generous profit sharing scheme tends to ruffle some feathers among employees at other airlines. For example, American flight attendants recently got 1.1% profit sharing for 2023, which is a far cry from what Delta employees are getting.
Delta’s motives for its profit sharing arrangement also goes beyond just having a good corporate culture. The airline has the highest percentage of non-unionized employees of any major airline in the US, with flight attendants not being unionized.
So the airline not only proactively gives flight attendants raises, but also has generous profit sharing to create an overall rewarding compensation structure for employees. While unions can also try to negotiate profit sharing, it’s hard to imagine employees will come out ahead at other carriers compared to Delta.
Bottom line
Delta employees should be pretty pleased this week, as they’ve just received their share of $1.4 billion in profit sharing, equal to 10.4% of their eligible annual pay. Delta is in a league of its own on that front, as the airline pays more in profit sharing than all other US airlines combined. While I have many criticisms of Delta, the carrier’s relationship with its employees isn’t among them, and it’s something the company deserves credit for.
What do you make of Delta’s profit sharing scheme?
This is why I’ve always loved DL. loved working for them years ago. Would love to work for them once more.
I flew DL on Thursday and every employee I saw was super cheerful! So, yeah, that profit sharing put some extra pep in their step!
Glad the employees are getting paid but it would be nice if Delta spent some money on MORE COMFORTABLE SEATS!
I’m on a ATL-FLL flight in comfort plus (name is biggest joke ever) and the seats appear to be brand new and yet are hard as a rock, so uncomfortable that we’re only taxiing and already I want to get off.
Why airlines can’t actually give customers something comfortable to sit on is beyond...
Glad the employees are getting paid but it would be nice if Delta spent some money on MORE COMFORTABLE SEATS!
I’m on a ATL-FLL flight in comfort plus (name is biggest joke ever) and the seats appear to be brand new and yet are hard as a rock, so uncomfortable that we’re only taxiing and already I want to get off.
Why airlines can’t actually give customers something comfortable to sit on is beyond me. JetBlue seats are far and away the best. Platinum/Biz traveler longing for a different experience
all kinds of rationales, gripes, 'but ...' ... bottom line, Delta paid $1.4BILLION to it's employees, 10.4% of their annual salary. It's safe to assume employees at all the other carriers heard the news, don't view their management as favorably. Although, I flew AA internationally from DFW last week because I needed non-stop ... I didn't notice any difference from what it's always been ...
This is a brilliant strategy by delta - particularly with tight labor supply. They can actually recruit employees with the promise of a 10% bonus per year, while lowering their base pay by 10% and ultimately paying .99/$ compared to their competitors. You are a moron if you fall for this.
Actually not true. As someone who has been looking for jobs in this industry, Delta typically pays equal or more at virtually every role, accounting for cost of living adjustments based on city.
I'm not sure where your data comes from, but from online pubkished data I see that Delta's hourly rate is also the highest for cabin crew.
And do they actually do it? Is the base pay at Delta 10% lower than at other airlines?
No, Samo, it's not. @Joe and and @Powerball are correct. DL pay is competitive with other airlines for all positions - union and non-union. And, also, the voluntarily gave FAs boarding pay, which is a huge deal for them. They're not perfect by any stretch, but @Vinay pulled that out of his ***
All this profit yet they still don't share it with their wholly own subsidiaries who contributed to the profit.
Although it applies equally to all eligible employees at Delta, the Delta pilots negotiated the generous profit share plan as a return on the investment they made in helping the Company return to solvency during bankruptcy.
This is not something given out by Delta from the goodness of their hearts. Without the negotiated pilot's agreement, the general employee population would be receiving similar to AA profit share of 1%, not 10%.
That’s speculative and unproven. And Delta pilots received $2 billion in stock for the termination of their pension plan which was driven by lump sum payments of over $1 million to those who retired.
None of which changes that all current Delta employees received the same percentage of their salaries yesterday
Gary H is actually factually correct.
It is proven, bankruptcy negotiations are well documented. You can’t rewrite history. The pilots negotiated profit sharing at Delta.
It is indeed true. ALPA voted down a reduction in profit sharing during failed contract negotiations in 2015. This new and reduced profit sharing formula was forced upon non-contract employees shortly there after, while the Pilots kept the current formula in a re-work of the failed agreement. That lasted for a couple years.....Pilots one (more generous formula, the current one) set up, and all others a less generous one. Management raised it to match the...
It is indeed true. ALPA voted down a reduction in profit sharing during failed contract negotiations in 2015. This new and reduced profit sharing formula was forced upon non-contract employees shortly there after, while the Pilots kept the current formula in a re-work of the failed agreement. That lasted for a couple years.....Pilots one (more generous formula, the current one) set up, and all others a less generous one. Management raised it to match the pilots eventually as the optics were poor. Pilots lead the way on this particular item over and over
The first part of Gary's statement is factually correct. Unless there's a management statement the second part is speculation to the motives of management. Pilots can only negotiate for themselves, as is the case with every bargaining unit. None negotiate for non-union employees. I've worked as a non-union employee in a union environment. It is the general practice to MATCH union agreements for non-union employees. It's actually quite annoying as it keeps non-union employees from...
The first part of Gary's statement is factually correct. Unless there's a management statement the second part is speculation to the motives of management. Pilots can only negotiate for themselves, as is the case with every bargaining unit. None negotiate for non-union employees. I've worked as a non-union employee in a union environment. It is the general practice to MATCH union agreements for non-union employees. It's actually quite annoying as it keeps non-union employees from receiving typical non-union benefits, such as merit pay. So, what Delta did is what virtually every other company does with their non-union employees, not a response to poor optics.
DL has a lot of crew based in ATL, as it is their largest hub. In addition, Delta also has its headquarters there, and a main office for every department that makes up the airline, including scheduling, HR, etc. Most of the people behind the scenes taking care of Delta flights to make everything run on time (and who are not needed to be based at the airport where the flight is to/from) are based...
DL has a lot of crew based in ATL, as it is their largest hub. In addition, Delta also has its headquarters there, and a main office for every department that makes up the airline, including scheduling, HR, etc. Most of the people behind the scenes taking care of Delta flights to make everything run on time (and who are not needed to be based at the airport where the flight is to/from) are based in ATL. Delta also has its main (if not only) maintenance center at ATL.
I'm not sure I'd call their fleet "largely outdated". I agree the 767-300s are horrible now, and the A330-200s/300s are outdated, but Delta far and away leads U.S. airlines with their domestic fleet. United still has a long way to go on their narrowbody refits. Delta also has 45+ planes with Delta One Suites (doesn't include the former LATAM A350s) and 21 767-400s with new Delta One seats.
Are you forgetting the A319s and A320s. How about the B717? Some of Delta’s 757’s are over 30 years old and many of their 767s fly domestically. I don’t think Delta’s present domestic fleet is anything to boast about.
Besides ATL being a fortress hub for Delta in Georgia with many frontline employees, all their corporate employees (since HQ is in ATL) that are below the general manager level receive profit sharing as well (analyst, IT folks, etc.); and they have very good salaries. So that is why it is so big in Georgia.
And they had Ludicris do a concert on the ATL ramp.
"Now, I do think Delta has lost some of its edge when it comes to service since the start of the pandemic, given the percent of Delta’s workforce that’s new."
@Ben - In what areas do you think Delta employees being new is the primary reason why their service isn't as superior as pre-COVID? Delta has lots of employees, but the most "passenger-facing" employees on a given trip are flight attendants, and I don't...
"Now, I do think Delta has lost some of its edge when it comes to service since the start of the pandemic, given the percent of Delta’s workforce that’s new."
@Ben - In what areas do you think Delta employees being new is the primary reason why their service isn't as superior as pre-COVID? Delta has lots of employees, but the most "passenger-facing" employees on a given trip are flight attendants, and I don't think a flight attendant's tenure is a primary driver of their level of service. I don't think they learn to smile or address passengers by name or be proactive as a result of a longer tenure. Greater tenure almost surely helps pilots and maybe call center or check-in/gate agents, but I almost never interact with pilots and rarely interact with call center and check-in/gate agents. Flight attendants are either internally motivated to provide good service or buy into the "good service" culture at Delta, but I don't think it takes years of service for company culture to impact a given employee's service level.
I was just talking to a mid-level employee in the baggage/logistics group in Atlanta who has worked for DL for 20+ years. He said that in his department they had an 80% turn-over during and coming out of the pandemic. He said that the new people, having been hired in a matter of months rather than over many years (like the ones they replaced), do not have the pride in the company, the work ethic,...
I was just talking to a mid-level employee in the baggage/logistics group in Atlanta who has worked for DL for 20+ years. He said that in his department they had an 80% turn-over during and coming out of the pandemic. He said that the new people, having been hired in a matter of months rather than over many years (like the ones they replaced), do not have the pride in the company, the work ethic, and the passion for serving their passengers that the former employees had. He said in a real world example that bags are taking longer to get on/off the planes, have increased rates of lost bags, and the technology has improved over this time. The only logical conclusion is that it's the people.
that is true throughout the US economy. The notion that the airline industry or Delta is unique in having to get a new group of people up to pre-covid levels of customer service is naive.
You just literally described 90% of companies post covid. Most aren't the same from a service, loyalty and pride perspective.
Yes, new generation is no longer beholden to a non-living entity that would toss them aside at a moments notice but expects complete loyalty in return.
Let's be clear. Delta doesn't do this out of the goodness of their heart. The Pilots achieved this in Bankruptcy in exchange for HUGE pay cuts. Back when no one ever thought airlines would be profitable enough to pay out. When it started to pay out, the Company tried to claw it back and the Pilots said no. Then because it was going to pay out so well to the Pilots, Delta added the other...
Let's be clear. Delta doesn't do this out of the goodness of their heart. The Pilots achieved this in Bankruptcy in exchange for HUGE pay cuts. Back when no one ever thought airlines would be profitable enough to pay out. When it started to pay out, the Company tried to claw it back and the Pilots said no. Then because it was going to pay out so well to the Pilots, Delta added the other employee groups...why? Because the Pilots are the only ones unionized and Delta wants that to remain for the others. Rest assured, though, if it wasn't required for the Pilots then Delta wouldn't be so "generous".
That’s speculative and unproven. And Delta pilots received $2 billion in stock for the termination of their pension plan which was driven by lump sum payments of over $1 million to those who retired.
Most of the stock was sold long before it reached its value 8 times higher than that
"But still, the airline is a cut above the rest when it comes to taking care of and showing appreciation for customers."
I suppose this is difficult to establish objectively, but this has certainly not been my experience. The US3 are all hit or miss, but given the choice I'd take a UA or AA crew over a DL one any day.
when companies serve over 100 million customers/year, as all of the big 4 US airlines do, anecdotes don't mean much.
Delta is at the top of the industry in just about every customer service and financial metric and it is both that give Delta plenty of reason to keep its employees at the top of industry pay, which they are.
Top of industry is not flawless nor necessarily leaps and bounds better but enough better to end up in total better than its peers.
In any event, hopefully DL can find leadership who are able to turn stuff like this around: https://www.travelmarketreport.com/articles/Here-Are-the-Best-US-Airlines-According-to-Customer-Satisfaction-Ratings
This week is known among car and boat dealers in the SE as one of the best weeks for purchases. Many crew members live in Florida so the impact is probably not reflective of where employees are based but where they live.
A look at DL's 2023 finances show how much more they generate in "other" revenue - loyalty and credit card programs and MRO revenue, the latter of which has significant growth potential...
This week is known among car and boat dealers in the SE as one of the best weeks for purchases. Many crew members live in Florida so the impact is probably not reflective of where employees are based but where they live.
A look at DL's 2023 finances show how much more they generate in "other" revenue - loyalty and credit card programs and MRO revenue, the latter of which has significant growth potential in the next couple years. DL also paid $1.5 billion less for jet fuel in 2023 than AA or UA. Those two combined explain why DL is able to make as much as it does and invest in its employees - which in turn allows them to capture more business travel than any other US airline and generate more revenue than any other airline in the world.
Service throughout the US has taken a hit since the pandemic but DL is already back to multiple consecutive days with no cancellations and they will train their new staff to deliver the service that distinguished them.
Bastian said: "It’s always my No. 1 priority to take care of the Delta team".
Wait -- what?! I thought safety was always the number 1 priority. What number priority does safety have, now it's no longer first for Delta?!
Ed B has always been good to Delta employees. He gave record pay raises to pilots with their new contract and offered boarding pay to FAs which was not done in the industry before Delta offered it.
Every CEO has at least five No 1 priorities...it's the problem with cliches. It doesn't mean that he isn't laser focused on employees and safety (which honestly go together). Boeing could learn a few things from Delta.
Should be equal sum payments across all employees. Perhaps different based on years of service, or even no profit sharing for union employees or those who make over $250k. $500k pilots don’t need an extra $50k.
Sel,
It was the Pilots union that negotiated the current profit sharing formula during DAL's bankruptcy. In 2015 the Union voted no on a deal that would have lowered the formula, then they subsequently ratified a second deal that kept the formula in place. DAL management then lower the non-union employees' profit sharing %, so for a couple years the pilot's had X and the others had .66X or so. Management wisely realized this...
Sel,
It was the Pilots union that negotiated the current profit sharing formula during DAL's bankruptcy. In 2015 the Union voted no on a deal that would have lowered the formula, then they subsequently ratified a second deal that kept the formula in place. DAL management then lower the non-union employees' profit sharing %, so for a couple years the pilot's had X and the others had .66X or so. Management wisely realized this wasn't sustainable and raised all employees profit sharing to its current formula ie the one the Pilots Union negotiated
Not speaking down to you, just a lot of history behind the subject.
Worked out well for me. At the time it was touted as giving the employees more money in their salary versus getting a larger one-off lump sum with profit sharing. When the profit sharing formula changed, they gave everybody a 14.5% bump in their salary. They subsequently changed the profit sharing formula back after employee feedback, but we kept that 14.5% in addition.
Pilots are the reason why everyone in the company is receiving 10% profit share.
Although it applies equally to all eligible employees at Delta, the Delta pilots negotiated the plan as a return on the investment they made in helping the Company return to solvency during bankruptcy.
Delta isn't paying everyone above and beyond out of the goodness of their hearts. Thank a pilot for this industry best profit share.
Its part of the pilots negotiated compensation package.
You meant Aeroflot, right???