Delta announced Wednesday a hefty wage hike for its flight attendants, ground crews and office staff, along with changes to its 401(k) and profit-sharing plans.
After raking in $2.2 billion in net profit in the first half of this year, Delta Air Lines announced Wednesday a hefty wage hike for its flight attendants, ground crews and salaried office staff, including more than 3,000 employees in Washington state.
Effective Dec. 1, base pay will increase by 14.5 percent for most of Delta’s 80,000 employees. When combined with pay increases in April, pay rates for most employees will be up 18 percent or more in 2015, the company said.
In a memo to employees, Delta chief executive Richard Anderson touted the move as providing “record pay raises in a year of record profits.”
“Few companies can match that,” Anderson wrote.
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In addition, from next year Delta will increase the company match to its 401(k) retirement savings plan by one percentage point, bringing the total available company contribution to 8 percent.
At the same time, Delta made changes to its long-standing profit-sharing program, which pays out every February, that will reduce bonuses from highly profitable years.
This year, that program paid out a record $1.1 billion in bonuses based on 2014 profits, or more than 16 percent of eligible employees’ earnings.
Affecting payouts in 2017 and beyond, Delta is changing the trigger for increasing the percentage of profits that go into the pool for sharing. Instead of the current set figure of $2.5 billion, that trigger will now be the previous year’s profit.
Last year, the company made $4.5 billion in net profit. In a comparable future year, the new formula would therefore decrease the payout.
However, it will increase the payout when profits fall below $2.5 billion and then recover the next year.
The shift seems intended to put more emphasis on base pay rather than bonuses.
“You have made it clear that you want more in your monthly paychecks,” Anderson wrote in the memo.
The changes affect all Delta employees except top executives plus two unionized groups with separate contracts: some 13,000 pilots and a couple of hundred dispatchers.
A largely non-union airline, Delta has 20,000 flight attendants who are the target of an organizing drive by the International Association of Machinists.
The union has claimed in flyers distributed to flight attendants that Delta’s pay raises lag those at unionized airlines.