Delta Air Lines pilots have ratified a new contract, expected to be a benchmark for contract negotiations at rival airlines, that includes more than $7 billion in cumulative pay and benefit increases over four years, their union said Wednesday.
Both American Airlines and United Airlines have promised their pilots an “industry-leading” contract. As a result, their pilots say any proposal deemed inferior to Delta’s will likely not be accepted.
The new contract calls for a 34% cumulative wage increase, a reduction in health insurance premiums, and improvements in holiday pay, vacation, company 401(k) contributions and work rules. This agreement will cover 15,000 Delta pilots and will take effect Thursday, the Air Line Pilots Association (ALPA) said.
→ Delta Sky Club opens lounge at Kansas City airport
The new contract highlights the bargaining power enjoyed by pilots at a time when airlines are scrambling to staff up to meet travel demand.
But some airline executives worry that steep pilot pay hikes will inflate fixed costs and make it harder to repair debt-laden balance sheets.
Delta has forecast an impact on its first-quarter profit, as the pilot agreement is expected to increase its operating costs, Reuters reported.
American Airlines said Wednesday that the agreement Delta Air Lines has reached with its pilots “profoundly” changes the economics of the entire airline industry.
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