Delta paying $1.4 billion in profit sharing payments to employees

By Chris Isidore, CNN

New York (CNN) — Delta Air Lines is paying out $1.4 billion in profit sharing, more than double what it paid employees a year ago.

The payments, which more than 100,000 Delta employees received Wednesday, come to about 10% of their annual salary, or more than a month’s pay. All Delta employees below mid-level managers participate in the program, the airline said.

The payout is up 146% from the profit sharing payment of a year earlier, and well above the $108 million for 2021. There was no profit sharing for 2020 due to the record losses at the airline due to the plunge in demand for flying during the first year of the pandemic.

This is the second largest profit sharing payout by Delta, trailing only the record $1.6 billion it paid for 2019. That bonus was roughly equivalent to two months of pay per employee.

Delta is primarily a nonunion company, with only about 20% of its employees being unionized, primarily its 18,500 pilots. The Association of Flight Attendants has been trying to organize its flight attendants, so far without success.

Profit sharing plans became more common in the airline industry after a series of bankruptcy filings and money losing years, as well as consolidation in the industry earlier this century. Unions, stinnging from concessions they gave up during bankruptcy, agreed to the profit sharing plans as a way to recoup some of what members had lost. Primarily nonunion Delta, which was formed by a merger of Delta and Northwest Airlines as they came out of bankruptcy, has the most lucrative profit sharing plan in terms of the percentage of profits paid to employees.

Management generally prefers to have more of employee compensation tied to profits because it limits its labor costs during years when a company is struggling financially. At a nonunion company it can set the terms of compensation without negotiations. Unions generally push for more of compensation to be part of standard pay rates so that employees are not hurt by economic downturns.

But there are union contracts that include profit sharing payments, including the pilots at Delta, who get the same profit sharing formula as the nonunion employees, as well as some unionized employees at other airlines.

In addition, United Auto Workers union members at General Motors received an average profit sharing payment of $12,250 for 2023, and UAW members at Ford got an average of $10,416, despite the cost of the strike the UAW waged at both companies that reduced their profits. The average profit sharing payment came to about $14,000 for Delta employees.

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