Delta offers pilots hefty pay raises as unions flex bargaining power

Delta has offered a 34% cumulative pay increase to its pilots over three years in a new contract, demonstrating the bargaining power aviators are enjoying in a short-staffed industry with booming travel demand. If the deal is approved by Delta pilots, it is widely expected to act as a benchmark for contract negotiations at rivals United Airlines and American Airlines. Delta pilots will get a raise of at least 18% raise on the date the contract is signed, another 5% after one year, 4% after two years and 4% after three years, according to a draft contract seen by Reuters. They will also get a one-time payment equivalent to a cumulative 22% of their earnings between 2020 and 2022 after the deal is ratified. The Atlanta-based carrier's pilots have been working without a new contract for nearly three years after their old contract became amendable in December 2019, fueling frustration. They voted overwhelmingly in October to authorize a strike if negotiators could not reach an agreement on the new contract. The hefty pay raises are expected to further worsen cost pressures for carriers just as concerns over a US recession spark worries about consumer spending. Although ticket sales remain strong, investors fear travel demand could slip, making it harder for a debt-laden industry to repair its balance sheet. They fear carriers might be forced to borrow even more money to fund operations.<br/>