© Reuters. FILE PHOTO: Delta Air Lines pilots, represented by the Air Line Pilots Association, protest outside Terminal 4 at JFK International Airport in New York City, US, June 30, 2022. REUTERS/Shannon Stapleton
By Rajesh Kumar Singh and David Shepardson
CHICAGO (Reuters) – Delta Air Lines has given its pilots a 34 percent pay raise over three years in a new contract, showing that pilots are enjoying themselves in an industry with fewer people wanting to travel.
If the agreement is approved by Delta pilots, many are expected to be a symbol of the negotiations between United Airlines and American Airlines (NASDAQ:).
Delta pilots will get a raise of at least 18% the day the contract is signed, another 5% after one year, 4% after two years and 4% after three years, according to the agreement seen by Reuters.
He will also receive a one-time payment equal to 22% of his earnings between 2020 and 2022 if the contract is approved.
Atlanta-based airline pilots have been working without a new contract for nearly three years after their previous contract was renewed in December 2019, causing frustration.
They voted overwhelmingly in October to authorize a strike if negotiators cannot agree on a new contract.
BURNING SYSTEMS, ALL TYPES
The hike in premiums is expected to increase price cuts for carriers as U.S. concerns grow about consumer spending.
Although ticket sales remain strong, investors fear that demand for travel could fall, making it difficult for the debt-ridden industry to restructure its finances. They fear that carriers may be forced to borrow more money to finance operations.
The struggle, however, among the carriers to take advantage of the increasing number of consumers has increased the bargaining power of the airlines. As the industry returns to profitability, pilots argue that airlines will have to pay more to recoup their costs.
Airlines, until now, have relied on strong demand and higher prices to offset inflation. Any increase in their operating costs is expected to be passed on to customers through higher ticket prices.
In the agreement, Delta promised that the wages of its pilots will exceed those of the United States and America by 1%.
In a memo to its members, the union representing Delta pilots said the deal represents more than $7.2 billion in savings over the next four years.
Delta said it is “pleased to have agreed to a new pilot contract, which recognizes the contributions our pilots have made to Delta’s success.”
In a year of industrial protests, pilots in all major US states have been demanding higher wages and better working conditions.
Hundreds of United pilots picked up outside Chicago’s O’Hare airport on Thursday, demanding a “labor-leading” union. Last month, he rejected a proposal that included a salary increase of more than 14.5% and additional pay and training.
American Airlines also rejected a 19% wage increase over two years that would have cost the Texas-based carrier nearly $2 billion.
Pilots also want to have a good life. They say the problems of workers and the work of the carriers are driving long hours, leaving them exhausted.
In its statement, the airline Delta said that more than 25% of the cost of the contract is allocated to life-related issues.
The proposed contract also provides for 10 weeks of paid maternity leave, two weeks of paid parental leave and reduced health insurance premiums.