Delta Air Lines and its pilots union said yesterday that they had reached agreement on a new contract that would pay pilots an average of $238,000 a year to fly the carrier's new Boeing 777 jetliners.
The deal, which needs the ratification of the airline's 9,200 pilots, would make the Delta pilots the highest-paid 777 pilots in the industry and would clear the way for Delta to complete the purchase of 11 more 777s.
Delta now operates two 777s, but it postponed delivery of the 11 others after failing to reach a pay agreement with the Air Line Pilots Association (ALPA) in June. Equally important, the agreement--which also covers pay for pilots of the new Boeing 767--appears to signal a breakthrough in negotiations for a broader contract for all pilots at the nation's third-largest airline. The current contract will expire in May, and the wage rates negotiated this week can be renegotiated as part of any new agreement.
"While this tentative agreement is important in itself, it also sets a constructive tone as Delta and ALPA continue negotiations for a new comprehensive pilot working agreement," Delta President Leo Mullin said in a statement.
Charles Giambusso, head of the pilots union at Delta, seemed to agree. "To use a football analogy, this is a big score for the Delta pilots, but the game is not over," he said in a statement, alluding to the broader, ongoing contract negotiations.
The pay rates for 777 pilots would be $250 an hour upon ratification of the contract and rise to $265 an hour on Jan. 1. Pilots flying the Boeing 767 would receive $230 an hour after ratification and $245 an hour Jan. 1. Delta pilots fly an average of 75 hours a month, with a maximum of 82 hours.
Delta originally had offered the 777 pilots $232 an hour, with the union demanding $346 an hour. The agreement, reached Wednesday night, is far less than the union originally proposed but contains other contract improvements the union wanted--including the end of a two-tiered wage system under which new pilots were hired at a lower starting rate than pilots already on the payroll.
Delta also agreed to end its profit-sharing program and convert the money into a 6 percent base pay increase for all pilots. It is this payment that would boost pilots' pay on Jan. 1.
Putting money into the pilot's base pay means the increase would apply to pensions and other fringe benefits as well as boosting the pay base for the next round of negotiations. Profit-sharing money, like a lump-sum bonus, would not go into base pay calculations.