American Airlines Pilots Are Mad Delta Colleagues Are Getting All the Money
Delta Airlines may have been its employees' best Valentine: on February 14, Delta announced that it will distribute more than $1.1 billion in profit-sharing bonuses from 2017 earnings.
“This is the fourth year in a row that Delta’s profit sharing has topped $1 billion — a milestone no company in history has ever achieved,” said CEO Ed Bastian. “Delta people are the reason for our success, and Valentine’s Day is our favorite day each year as we celebrate the incredible results our people have delivered.”
According to the Allied Pilots Association (APA) union, Delta shares 10% of pretax profits up to $2.5 billion, and 20% above $2.5 billion. United shares 10% up to a 6.9% pre-tax margin and 20% above that margin. American shares 5% of its pretax profit, the lowest rate among US majors.
For Delta pilots, the best paid line employees at any airline, this results in quite a sizable payout. According to union figures, based on 2017 earnings and profit-sharing numbers, Delta captains will receive a whopping $29,000 to $59,000, depending on tenure. In comparison, a United captain will receive between $9,300 to $20,500 in profit-sharing bonuses, while American Airlines captains will receive a measly $3,600 to $7,500.
A union representative at American is, unsurprisingly, not happy that the other guys are getting all the money. "The profit sharing pool at Delta is an Olympics-size pool," he said. "American’s is a kiddie-size pool." (Not that pilots are exactly starving, in general. Their salaries have risen significantly in recent years, at least for those with more seniority.)
Delta says it has paid out over $5 billion through the profit-sharing program over the last five years, and the average Delta employee will receive around $6,000 as a bonus for 2017. That's more than 10% of average base pay for most employees. These bonuses exist despite the fact that Delta's made quite a bit less net profit last year than the year before: about 18 percent less, with $3.6 billion in net income in 2017, compared to $4.4 billion.
Delta employees make about 80% more in 2018 than they did a decade ago, according to the airline.
Profit-sharing at American Airlines is a recent development: AA employment contracts before 2015 did not include any form of profit-sharing, and the airline went beyond the contract to introduce profit-sharing at the same rate that existed before American's merger with US Airways in 2013. In addition, American Airlines also implemented a mid-contract pay increase of 8% for its pilots in April 2017.