Major US airlines are trying to negotiate new contracts. They didn't have a lot of leverage to negotiate during the first two years of the Pandemic, so this is a great time to try and get a new contract.

Alaska Airlines is the only major US airline that has a new contract in place.

Delta & pilots reach agreement in principle on new contract

Delta and its pilots union have reached a preliminary agreement that would see pilots at the Atlanta-based airline get a huge pay boost. The new contract would be worth $7.2 billion over the course of four years according to a memo from the union.

Significant pay increases would be included in the new contract.

  • Pilots would immediately receive an 18% pay increase the day the contract is signed
  • Pilots would then receive a 5% pay increase one year after that
  • Pilots would then receive two 4% pay increases in the two years that follow
  • Pilots would receive a one-time payment of 4% of 2020 and 2021 pay, plus a 14% payment of 2022 pay

Quality-of-life improvements would make up 25% of the agreement's value. The new contract needs to be voted on by the pilots, so it will be several weeks until this is finalized.

In late October, Delta pilots voted to authorize a strike, with 99% of those voting in favor. This was more about sending a message to management than anything else, since the first step to a strike is authorizing a strike. There have been no strikes among pilots at the US airline for more than a decade.

Pilots at Delta are looking at huge pay bumps

How much would Delta pilots be paid with this new contract?

I wrote about how much airline pilots are paid in the past. The pay rates of the major airlines are published by AirlinePilot Central.

First officer pay varies from $92 to $242 per hour, while captain pay varies from $238 to $334 per hour. It is possible to add three zeroes to the end to figure out annual pay with Delta, but it is usually higher than that. If the contract is approved, Delta pilots will get a pay raise of over 30% over the next four years.

Delta's most senior captains would be making around $440 per hour, or around $440K per year.

With American and United both currently negotiating contracts, you can bet that pilots will look to Delta as a benchmark.

If pilots at other airlines get a better contract, Alaska will match it. Alaska pilots are entitled to the average of the top pay scales of American, Delta, JetBlue, Southwest, and United, so they could be getting some additional raises as well.

This would get Delta pilots industry leading pay

Bottom line

There is a tentative agreement between Delta management and the pilots union. The contract will be worth $7.2 billion to pilots over the next four years, with an immediate 18% pay raise, a further 13% in pay raises in the three years that follow, and quality of life improvements.

It's a good bet that both executives and unions at American and United are watching this closely.

What do you think of Delta?