Delay ends: Airline says it has found ways to deal with fuel prices, so increases are back on.
The Atlanta Journal-Constitution
Published on: 05/03/08
Raises are back in the works for Delta Air Lines' employees, the Atlanta carrier said Friday.
Delta said its 38,000 frontline employees —- flight attendants, ticket agents and other hourly workers who make up the bulk of its labor force —- will get 3 percent pay raises July 1. The raises do not apply to pilots, who could be getting bigger raises.
Management and salaried employees will also get varied raises that are generally targeted at 3 percent, the company said.
The move comes six weeks after Delta —- worried about skyrocketing fuel costs and a looming recession —- said it was delaying plans for pay raises for employees.
Delta's decision to raise nonpilot employees' pay also coincides with a pilots union vote on a contract tied to the carrier's plans to merge with Northwest Airlines.
The deal would grant pilots a 5 percent raise next year and 4 percent raises over the following three years. Delta's 6,000 pilots began voting Thursday on whether to ratify the contract.
Delta, which has about 48,000 employees, including about 25,000 in the Atlanta area, could also be hoping to keep its other employees happy for a couple of other reasons. It could use all the grass-roots support it can get as it works to navigate its merger proposal through Washington. Its 12,000 flight attendants are also voting this month on whether to join a union.
Delta's top executives, however, said the decision stems from renewed confidence in recent maneuvers to deal with high fuel prices and a gloomy economy.
"You'll recall earlier in the year we deferred a decision on these increases as we worked to re-forecast the impact that record fuel prices would have on our business and to make sure we can afford any pay adjustment we make," Delta Chief Executive Richard Anderson and President Ed Bastian said Friday in a memo to employees. "We've done that now, and our confidence in taking this step comes from the tremendous work you all are doing in those parts of our business we can control."
The executives cited progress the company has made in offsetting higher fuel costs, including meeting revenue targets and obtaining fuel-hedging contracts currently valued at $350 million. They said the company also remains "on track" to meet its target to cut annual operating costs by $550 million.
In March, Delta announced that cost-cutting goal as well as plans to eliminate 2,000 jobs to help offset fuel costs that have risen roughly 60 percent over the past year. The slowdown in pay raises originally planned for this summer was announced at the same time. Since then, Anderson said during a congressional hearing that an additional 1,000 job cuts were likely as a result of the merger.
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