Delta Air Lines CEO Ed Bastian has this week announced that employees will be getting a 5% pay raise. Well, all non-union employees.
In this post:
Non-union Delta employees get pay bump
As of April 1, 2023, Delta is offering a 5% base pay increase for ground and flight attendant employees, at all steps of the pay scale. This is Delta’s second pay raise in the past year, as Delta awarded a 4% pay increase in May 2022.
This includes all employees worldwide, other than those covered by an industry or government requirement, or a collective bargaining agreement. For example, pilots are the biggest group at Delta that are unionized, and they’re nearing a new contract and should get big pay raises, but this hasn’t yet been ratified.
Delta also does more profit sharing than any other US airline, and next week on Valentine’s Day, Delta will pay out more than $550 million in bonuses. That amounts to about 5.57% per eligible employee (and this includes union employees too), which the memo describes as more than the profit sharing pool of all competitors combined.
Here’s how this plays into Delta’s overall vision, per Bastian’s memo to employees:
“With the pandemic now behind us, we are focused on elevating our world-class performance and service to widen the gap with our competitors. When we deliver for our customers, their loyalty drives continued reinvestment in you and our business. This virtuous circle is powered by our 90,000 people, which is why I’m happy to announce our next pay increase, effective April 1.”
“This well-earned increase is a direct result of your efforts. I can’t thank you enough you for your continued commitment and the care you demonstrate to each other, our customers, and the communities we serve.”
Delta does a good job keeping employees non-unionized
Delta is unique among US airlines when it comes unionization. Delta has the fewest unionized workgroups of any major US airline. While there have been efforts for many years to get more groups to unionize, in the end a majority always voted against it.
Delta does a good job finding a balance, by treating employees well, aligning them with the company’s mission, incentivizing them with big profit sharing, and providing plenty of proactive pay raises. Ultimately unions at other airlines don’t have a lot to show when it comes to pay negotiation compared to Delta.
As long as a majority of non-unionized Delta employees continue to be happy with that arrangement, I think Delta should be commended for being able to maintain such good relations. These kinds of pay raises, along with being the first airline in the US to start paying flight attendants during boarding, go a long way to earning the trust of employees.
Bottom line
Delta employees are getting a pay raise of 5% as of April 2023, which is the second pay raise in less than a year, as they also saw a 4% pay raise in May 2022. On top of that, Delta will shortly be awarding more profit sharing than all competitors combined.
Congrats to Delta employees on their upcoming pay bumps!
What do you make of Delta’s pay raise for non-union employees?
Delta pays a higher base rate for flight attendants. But all of the overrides (international, lead/purser, incentive pay) are significantly lower. When these are factored in, the difference between Delta and the next highest paying company is less than $1.50. And the increase is not retroactive. For example, when American Airlines settles a contract with their flight attendants, they will receive back pay from 2019 - when the previous contract expired.
No wonder delta one prices between nyc and ca haven't dropped below $999 in the last 18 months.
Is there such a thing as an automatic inflation difference wage increase in the US? Because if not then they lost out big in the past few years
@ArnoldB, if every employee in the US had their wages increased by the rate of inflation each year, inflation would never stop rising at it's current rate...Econ 101.
It was a given that non-union employees would get a pay bump when the tentative agreement with the pilots was announced.
The real question is not how much Delta pays its employees but how they can generate so much better profits and their employees understand their own employees are the reason why and share in it when other airlines can't.
The genius of what Delta has done for nearly a century is that no one else has been able to copy it.
@TimDunn I am getting the sense that Delta is being run for the bennifit of employees rather than the investors/owners of the airline. It is important to have fairly compensated employees to provide a quality experience for customers.
But it is also fair that the company returns some of the profit to the shareholders holding the risk. Delta's stock in March 2021 was trading above $50, today it is below $40.
Not sure it's...
@TimDunn I am getting the sense that Delta is being run for the bennifit of employees rather than the investors/owners of the airline. It is important to have fairly compensated employees to provide a quality experience for customers.
But it is also fair that the company returns some of the profit to the shareholders holding the risk. Delta's stock in March 2021 was trading above $50, today it is below $40.
Not sure it's "genius" when you raise your compensation base (salary+profit sharing) significantly above your competition. The next recession is going to make this painful for Delta.
Treating employees better is part of the reason why they are arguably the best US carrier and why they typically earn the most money and have the highest efficiencies. Treat employees better and it will trickle down to better returns for shareholders. I agree that the stock price is very undervalued at the moment but the market isn't rational either.
@Brian, the good thing about profit share, is that it automatically adjusts to increases and decreases in profits. No profits = no profit share. Agree that the share price has been impacted by Delta's comments around their last earnings call on rising wages impacting profits, but that's happening across the industry. AA, UA, SW, all their stocks are down from March 2021.
God i hope United follows this
Clearly genius by Delta, as Tim Dunn will soon tell us.
Keep in mind the only union at Delta is the pilots union, no others. Why is there a need for a union if the employer is willing to give raises to it's employees and treat them well? Unions are nothing more than an outdated money scam!
It's important to recognize that the union agreements for other airlines directly affects Delta. DL needs to provide competitive wages and benefits, and is directly competing against union rates. A rising tide lifts all ships.
I'd argue the opposite, that the unions representing employees at other airlines are playing catch-up with Delta. Delta's also reached agreement, subject to ratification, on their pilot contract before all the other US majors.
Non pilots are complaining that a union is good based on the much higher pay raise. But those complaining should be happy they're not seeing retraction in their industry as is happening in many others these days. I'm lucky that I managed to get a 3% raise this year, many of my neighbors are seeing layoffs