Pilots at Delta Air Lines have ratified a new contract that includes over $7 billion in cumulative increases in pay and benefits over four years and is widely expected to be a benchmark for contract negotiations at rival carriers.
United's pilots have been conducting informational pickets to express frustration over delays in contract negotiations. American pilots, who received their last pay increase in 2019, have also been protesting for a new contract.
The ratification of Delta's deal is expected to put greater pressure on the two carriers to conclude their contract negotiations. American called the deal a "great" news for its pilots, adding it looked forward to reaching an agreement on new contract "quickly." But it also said Delta's contract has "profoundly" changed the economics for the entire airline industry.Some airline executives are concerned that hefty pay raises for pilots will inflate fixed costs and make it tougher to repair debt-laden balance sheets.
Analysts at Jefferies estimate the United States is short of 10,000 pilots. This supply-demand gap is projected to last until 2027. Airlines are "in the war for talent," said Ben Friedrich, a professor at Northwestern University Kellogg School of Management. "It's hard for other airlines to retain their pilots unless they follow suit and raise pay to a similar extent."Our Standards:
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