Delta Air Lines, Pilots Struggle To Reach Salary Agreement

Delta Air Lines Inc. (NYSE:DAL) has been facing tough times with an ongoing dispute related to the salary of its pilots. As per Bloomberg and media reports, the company and its 13,000 pilots, who have different demands, are not able to finalize an agreement. The company had started mediation talks with pilots on Mar 31 this year, under the National Mediation Board. However, talks were suspended for three weeks, early this August, since the Board believed that there was a halt in progress to reach a deal.

Proposals by Delta and the Pilots

Delta has offered a 27% surge in salary to the pilots, over a period of four years. Contrary to Delta’s offer, the pilots are demanding a raise of around 37% over three years. The latest proposal by Delta was presented to the pilots in a letter by the Air Line Pilots Association Chairman for the Delta Chapter – John Malone.

The pilots are of the view that Delta’s profits have resulted from the cuts in benefits and salaries undertaken by the airline in early 2000s. These pilots are defiantly opposing Delta’s offer. As per the airline’s spokesperson, it is undertaking all efforts to ensure that a deal is reached at the earliest, benefiting both the company and the pilots.

Delta has been grappling with several issues in addition to pilot contracts. Earlier in August, the company suffered a computer outage issue in Atlanta, disrupting its worldwide operations and leading to several cancelled and delayed flights. This airline has also been suffering from declining Passenger revenue per available seat mile (PRASM). We wait to see if the company is able to reach an agreement with its pilots and ensure smooth operations.

Zacks Rank & Stocks to Consider

Delta Air Lines current carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the airline industry include Copa Holdings SA (NYSE:CPA) sporting a Zacks Rank #1 (Strong Buy), and ANA Holdings Inc. (OTC:ALNPY) and SkyWest Inc. (NASDAQ:SKYW) with a Zacks Rank #2 (Buy).