© Reuters. FILE PHOTO: A passenger walks past a Delta Airlines flight at Logan Airport at the start of the July 4 holiday weekend in Boston, Massachusetts, US, June 30, 2022. REUTERS/Brian Snyder/File Photo
It’s Jamie Freed
(Reuters) – Delta Air Lines (NYSE:) has offered a 34% pay increase to its pilots over three years in a new contract, in what is expected to be a sign of negotiations between United Airlines and American Airlines (NASDAQ) :).
But the proposed deal at Delta is unlikely to become a global example of the highest pay increases for pilots, experts say, because of the unique nature of the US market.
A GREAT RETURN
The U.S. airline market has risen in recent years at a faster rate than the rest of the world’s markets, according to the airline industry group IATA.
US domestic demand was only 0.8% below 2019 levels in October, while globally, domestic demand was down 22.1%. In September, US demand was 0.8% higher than in 2019.
In international travel, North American demand in October was 10% lower than in 2019, compared to a 17.6% drop in Europe and a 56.6% fall in the Asia-Pacific region at a time when China, which was the world’s largest market the world to go. it remains properly closed.
The return to the U.S. is a major change from 2020 when thousands of pilots, including 1,800 at Delta, retired soon after the COVID-19 pandemic forced airlines to demand more.
LACK OF REGIONAL STARTERS
The big increase in pay for Delta pilots follows a major increase in U.S. regional airlines that serve as feeders for major carriers.
Uniquely among international markets, the United States requires pilots even at regional airports to have at least 1,500 hours of flight experience. The law was enacted after the fatal Colgan Air crash in 2009.
In other parts of the world, major carriers such as Lufthansa and EasyJet (LON:) offer training programs that do not require any previous experience and allow participants to fly as a co-pilot upon completion.
In the United States, getting a commercial pilot’s license can cost upwards of $70,000, followed by the need to do 1,500 hours of low-wage work as a flight school instructor before even entering a regional airline.
The US Federal Aviation Administration in September rejected Republic Airways’ request to halve the requirement to 750 hours.
Faced with a shortage of entry-level pilots and a rapid shortage of experienced workers at major airlines, US airlines have raised wages quickly.
For example, Piedmont Airlines said in June it would nearly double annual pay for pilots and first officers to $146 an hour and $90 an hour, respectively.
The increase puts pressure on major airlines to ensure that their entry fees attract new entrants from the cargo sector to pay for retirement and the size of their planned fleets.
OUTSIDE THE UNITED STATES
North America is the only region with a pilot shortage at the moment, equivalent to about 11% of the supply, or 8,000 pilots, consulting firm Oliver Wyman said in July.
Europe and Asia have remaining aircraft carriers that are expected to last until the middle and end of the decade respectively, it said.
Wages paid by airlines outside the United States reflect the current situation and are often in line with the increase in earnings of airline workers as the industry recovers from the pandemic and inflation.
In Australia, Jetstar’s low-cost airline Qantas Airways last month agreed to a two-year salary increase followed by a 3% annual increase and a one-time bonus of about A$10,000 ($6,843.00), the same as that offered to other workers.
Hong Kong’s Cathay Pacific Airways (OTC:) has said it will raise average wages by 3.3% in 2023 and offer bonuses equivalent to one month’s salary to Hong Kong workers who meet their targets.
Air France in September raised wages for all employees by 5% in anticipation of next year’s wage talks, and offered a 1,000 euro ($1,057.50) bonus to its staff.
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