Valentine’s Day is extra special at Delta Air Lines.
The Atlanta-based carrier will pay a $1.6 billion profit-sharing bonus on Friday to its roughly 90,000 employees — about two months’ worth of pay. It’s the sixth straight year Delta is giving an annual bonus, and up from $1.3 billion last year.
Average pay at Delta outside the cockpit is also roughly 15% to 20% higher than for metro Atlantans. Include pilots, and it’s about double the city’s average.
Not everyone is happy, though. About 90,000 contract workers who aren’t direct employees won’t be getting the bonus. Such workers help push Delta passengers in wheelchairs, operate Delta Connection regional flights and at some airports check in Delta customers and handle their baggage.
It’s also unclear if Delta employees earn more — or even as much — as employees at other major U.S. airlines that are more unionized, when benefits are included. That’s even after including Delta’s bonus, the largest in the industry.
And there’s the question of whether employees would be better off with higher base pay than waiting on an unpredictable bonus that may or may not arrive in any given year.
“Profit sharing is really two-edged, and it receives different reviews depending on where you stand,” said Donald Maliniak, an airline labor law expert who teaches labor law at the University of Mississippi.
If the company is not profitable, “I can do my job as best as I can do it and still not get” that bonus, he noted.
Delta is planning a surprise for employees at an event in a hangar at Hartsfield-Jackson International Airport on Friday. In past years, the company put up a giant greeting card on its campus, gave out puzzle pieces to employees made from the skin of a Delta Boeing 747, and had celebrities and executives thank each employee by name over 50 hours on Facebook Live.
Meanwhile, catering workers plan to hold protests at Delta airport hubs around the country Friday amid an airline contractor labor dispute. The Association of Flight Attendants plans to relay a “If you like it, lock it in” message to Delta flight attendants the same day, pitching the benefits of collective bargaining as part of its unionization push at the airline.
Ed Bastian, Delta’s chief executive, makes a distinction between contractors who provide services for Delta and Delta employees.
“The profit sharing clearly goes to the people at the airline, who saved the airline, who put us back on the map, who made the sacrifices to get us to where we are today, and it’s our continued thanks and recognition for what they do,” he said in a recent interview.
Delta filed for Chapter 11 bankruptcy in 2005, emerging from a painful restructuring in 2007. A year later it acquired Northwest Airlines, becoming the world’s largest airline at the time. Since then, it has consistently ranked among the world’s most profitable airlines. Last year it reclaimed the mantle of largest airline by revenue.
Bastian acknowledged a chunk of employees’ compensation could evaporate if the economy falters and Delta’s profits fall. He called it a tool “to help manage a little bit of the volatility of the business, the ups and downs.”
Still, he added, “people like the big check…I think people really enjoy getting that big bonus on Valentine’s Day.”
Sara Nelson, international president of the Association of Flight Attendants, said profit sharing has been widely adopted at airlines but that many employees would prefer higher year-round compensation than a bonus.
For workers who wait for a bonus check to get their car fixed, make home improvements or pay for large medical expenses, “if you’re counting on this” and don’t receive it, “that’s a huge hit,” she said.
Delta’s pilots are unionized, like at most other major U.S. airlines. In contrast to other airlines, though, other Delta employees such as flight attendants and mechanics aren’t.
According to the the MIT Airline Data Project, the annual average wages and salaries for all employees at Delta in 2018 was $101,149 – nearly twice as much as the annual average wage for all occupations in metro Atlanta, at $52,750, according to May 2018 data from the Bureau of Labor Statistics.
Delta’s average is driven up by pilot wages and salaries, which averaged $230,669, and management wages and salaries, which averaged $137,636, according to MIT data. Delta flight attendants got an average of $59,053 annually, and workers who handle passengers, cargo and aircraft averaged $63,555.
Without profit sharing, Delta might not have what it calls “industry-leading” compensation among airlines. Even with it, there might not be much of a gap — if at all — when benefits are included.
To be sure, Delta is paying out the most profit sharing of any airline. Southwest is paying $667 million, equivalent to six weeks’ pay. United Airlines is paying out $491 million. American is paying out $213 million, though future payouts could increase under a proposed new labor contract.
Airline pay is complicated, particularly for crews who work unusual schedules, are on duty for periods longer than a scheduled flight and may be on call. But by some measures, other airlines’ employees get more when including pay and benefits.
The average annual wages and salaries of all employees except pilots among U.S. airlines in 2018 was highest at Delta, at $61,482 a year, according to MIT data. That was roughly $1,500 above the next highest, United.
But the value of pension and benefit packages was lower at Delta by more than $3,000 compared with American, United and Southwest, Delta’s biggest U.S. rivals.
For specific employee groups, like flight attendants, ground staff and maintenance staff, the pay comparisons vary.
The data are based on figures filed by airlines to the U.S. Department of Transportation, and profit sharing should be included in either pay or benefits totals, according to the DOT’s Bureau of Transportation Statistics.
Airline industry profits have been strong in recent years, but they’ve had a roller-coaster ride historically. That included a raft of bankruptcy filings at major U.S. airlines in the 2000s.
The International Air Transport Association in December forecast that global airline industry profits would grow to $29.3 billion in 2020 from $25.9 billion last year. But that was before the spread of the deadly coronavirus that’s wreaking havoc on Asia travel. Delta recently suspended flights to China, where the virus began.
Because Delta is mostly non-union, it also can unilaterally change its profit sharing formula for most employees.
In 2015, the company announced plans to reduce profit sharing for flight attendants, ground workers and other employees. Unionized Delta pilots had already voted against a similar change, and then after a smaller profit sharing payout in 2017, other employees raised concerns about the unequal profit sharing formula between pilots and other employees.
Later that year, in response to employee complaints, Bastian announced the company would shift back to a single profit sharing plan.
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