Pilots at Atlanta-based Delta Air Lines are set to get big pay increases if a proposed labor contract takes effect.
Delta pilots would get a pay increase of 4 percent later this year, followed by an 8.5 percent bump at the start of 2013, Delta pilots union chairman Tim O'Malley said Monday in a memo to pilots. Those increases would be followed by hikes of 3 percent in 2014 and in 2015.
The Delta pilots union's leadership approved the tentative agreement Monday morning, but member ratification is required.
"Some will argue these increases are not enough and that we should hold out for more," O'Malley wrote. But he argued there's value in "consistent year-over-year increases," which has led pilots at Southwest Airlines, for example, to earn high pay rates.
With the pay increases, a Delta captain flying the midsize Boeing 737 would make $216.92 per hour in 2015. At a work schedule of 75 hours of flying a month, that would amount to about $195,000 a year in base pay.
"It obviously sets a new standard that the other airlines must look at," said Louis Smith, president of pilot job website FAPA.aero. "The next decade clearly belongs to the pilots."
But not all pilots are expected to be happy with the deal.
After Sept. 11, 2001 and during Delta's bankruptcy from 2005 to 2007, "there are some pilots who paid a really big price -- a lot of them were unemployed, furloughed. Others were demoted, and everybody took a pay cut," during Delta's cutbacks, said Kit Darby, an aviation consultant and president of KitDarby.com. "They're saying, ‘We are now successful, we made sacrifices, and now we should be made whole.'"
Because of that, "there's a lot of pilots who are generally disgruntled over a long period of time," Darby said, and it won't necessarily be easy for the union to get approval of the deal, "But to me it's got enough merit to be passed," he said.
The deal would extend the Delta pilots' contract through 2015 and includes other terms such as increased contributions for retirement plans.
O'Malley urged pilots to vote to ratify the agreement, reached months before the current contract period concludes at the end of this year.
One reason the two sides reached the deal so quickly is that both sides had things to gain from changes in terms on what aircraft Delta can fly in the deal.
Along with increasing productivity for Delta, the deal also speeds up management's plan to restructure of its fleet of domestic planes. That can cut costs by retiring smaller, older planes, and improve the experience for passengers.
Among the possibilities discussed in the industry is that Delta could buy Boeing 717 planes from Southwest, which inherited the model through its acquisition of AirTran but has made clear that it would like to remove them from its fleet.
The memo to pilots included an expectation that Delta "will soon announce the purchase of aircraft contingent on the ratification of this agreement" -- which would create more job opportunities for pilots. In the new agreement, if Delta acquires the narrow-body aircraft, it would also gain the ability to outsource more flying on larger regional jets to contract regional carriers. That, in turn, allows Delta to retire more of the small 50-seat regional jets, which are less-efficient and thus more costly to fly.
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