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Delta Air Lines Offers Pilots 34% Raises Over Four-Year Deal

Pay proposal, which still faces some hurdles, could set bar for rivals also hammering out contracts

Airlines are once again turning a profit after a severe downturn during the pandemic.

By Alison Sider, WSJ

Dec. 3, 2022 10:28 am ET

Delta Air Lines Inc. DAL 0.93%increase; green up pointing triangle is offering pilots raises amounting to at least 34% over the term of a proposed deal, another sign of how pilots are pushing the now-booming airline industry for better pay and other benefits.

The proposal still needs to be approved by union leaders and then would have to be ratified by Delta’s pilots. But an agreement would set a bar for rivals that are also trying to hammer out new contracts in what has effectively become an industrywide standoff between airlines and pilots’ unions.

It includes an 18% raise when the deal is signed, followed by three further pay increases in subsequent years. It also includes a clause that guarantees Delta pays pilots at least 1% more than rivals at American Airlines Group Inc. AAL -0.07%decrease; red down pointing triangle and United Airlines Holdings Inc. UAL 0.00%increase; green up pointing triangle

“We are pleased to have reached an agreement in principle for a new pilot contract, one that recognizes the contributions of our pilots to Delta’s success,” Delta said.

Airlines and pilot unions have struggled to come to terms on new contracts this year, and rhetoric has often become heated. Airlines are once again turning a profit after a severe downturn during the pandemic, but inflation has raised pilots’ expectations for pay raises at the same time as carriers are coming under pressure to keep a lid on rising costs.

Pilots, battered by the pandemic and a rocky recovery that they say has often left them overworked and exhausted, have been holding out for better deals that offer improvements in things like schedules and vacation as well as pay.

Carriers have been scrambling to hire and train pilots, with short-staffed regional airlines negotiating massive pay increases—factors that have also played into the new dynamics.

Union leaders at the Allied Pilots Association, which represents pilots at American, last month shot down a proposal that would have raised pay about 20% over two years, saying it didn’t adequately address pilots’ concerns about quality of life and unreliable schedules. And United pilots also rejected a tentative deal that would have boosted pay by nearly 15% over 18 months.

The proposed agreement at Delta marks progress in a negotiation that had turned tense, and the airline is offering richer pay increases than what rivals have so far put on the table. The proposal includes lump-sum payments for a portion of their earnings from 2020 through 2022.

“There are numerous other work rule, pay, and benefit improvements that have been secured during the last three and a half years of negotiations,” negotiators told pilots in a message Friday evening. “Importantly—there are no concessions in this agreement.”

Delta’s negotiations began in 2019 and entered federal mediation in 2020, before being paused during the Covid-19 pandemic. Delta pilots voted overwhelmingly at the end of October to authorize union leaders to call a strike if they deemed it necessary—a vote that was largely symbolic but reflected pilots’ frustration with what they saw as stalled progress.