Majority of Delta Pilots Approve New Labor Contract


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Pilots at Delta Air Lines Inc. on Thursday ratified a new four-year labor contract that contains big raises and retains the aviators' lucrative profit-sharing formula, reversing widespread rejection of an earlier proposed pact in 2015.

Aviators at the nation's No. 2 airline by traffic voted 82% in favor of the new agreement, according to the Air Line Pilots Association union, with 95% of the eligible voters casting ballots. The deal includes a cumulative 30% raise by January 2019 and maintains an industry-leading profit-sharing plan in which the company pays out a proportionate 10% of pretax income up to $2.5 billion, and 20% on any profit over that amount.

Delta recently substantially trimmed the profit-sharing payout for its other employees, most of whom are not unionized. But the Atlanta-based airline has raised pay for most of them by 18.5% since April of last year and said it will tack on another 6% increase come April of 2017.

Due to the industry's record profitability, many new labor contracts that have been agreed recently contain big raises and other benefits, causing some investors to worry that airlines are recklessly raising their costs. But the unions are striking while the iron is hot, erasing concessions many made in the loss-making years after 9/11.

The new Delta pact triggers a me-too agreement for the 12,000 pilots at United Continental Holdings Inc. that they receive raises if Delta pilots vault ahead. Last month, Southwest Airlines Co. pilots agreed to a new four-year contract that will lift their pay by a cumulative 29% over the term. The new accord came after a majority of the 8,500 aviators shot down an earlier proposal in 2015.

The union representing 15,000 pilots at No. 1 American Airlines Group Inc. recently begun pushing for early renegotiation of the group's current contract. That pact, reached in early 2015, runs for five years and the Allied Pilots Association union says it puts the American pilots behind their peers until 2020. American has told the union it won't open the contract early, according to a company spokesman.

Write to Susan Carey at susan.carey@wsj.com


  (END) Dow Jones Newswires
  12-01-161135ET
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This article appears in: US Markets , Economy
Referenced Symbols: AAL , DAL , LUV , UAL


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