Delta Pilots Close to New Contract

[deicer]

https://onemileatatime.com/news/delta-pilots-contract/

Details in the article.

[Maverick]

"Delta first officer pay ranges from $92 to $242 per hour, while Delta captain pay ranges from $238 to $334 per hour. You can generally just add three zeroes to the end of that to roughly figure out annual pay, though with Delta it’s usually even a bit higher than that, thanks to profit sharing. If this contract is ratified, Delta pilots would be looking at pay raises of over 30% over the next four years.

In other words, Delta’s most senior captains would be earning roughly $440 per hour, or around $440K per year (and probably even more than that)."

[Maverick]

There's also a lot of pressure on Aircraft Maintenance Engineers wages as well. There's poaching going all over the country but particularly in YYZ and YVR. 

It's about time.

[Kip Powick]

Delta.......If mid Atlantic and the Captain Ramjet  decides to take a "dirt nap", and becomes cargo, does the FO automatically  move up the Captain's pay until the aircraft lands ?

Wonder if that is in the contract ?

[MCPSPEED]

16 hours ago, Kip Powick said:

Delta.......If mid Atlantic and the Captain Ramjet  decides to take a "dirt nap", and becomes cargo, does the FO automatically  move up the Captain's pay until the aircraft lands ?

Wonder if that is in the contract ?

 

[MCPSPEED]

I think would receive both hourly rates of FO+Captain pay.  A simple grievance should cover this

[Kip Powick]

39 minutes ago, MCPSPEED said:

I think would receive both hourly rates of FO+Captain pay.  A simple grievance should cover this

Be more of a morale booster for cabin crew if the FO took the left seat and a FA took the right seat and was given a few tasks plus FO pay for the remainder of the flight.

[Kip Powick]

 

Delta, pilots reach labor deal with 34% pay hike

https://www.cnn.com/2022/12/05/business/delta-pilots-labor-deal/index.html

((EXCERPTS))

If the deal is approved by Delta (DAL) pilots, it is widely expected to act as a benchmark for contract negotiations at rivals United Airlines (UAL) and American Airlines (AAL).

Delta pilots will get a raise of at least 18% 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.

 

[Rich Pulman]

Back in 2008/09 I remember having breakfast with a former Delta pilot who spent his entire aviation career with that company. We were in Brussels at the Jet Airways crew hotel. He was 64 years old and was just undergoing his initial line training with us on the B777. He hadn't flown since being forced out of Delta at age 60. He was crying. He explained that Delta had just gone through bankruptcy and his pension had been reduced to ~$40,000/year. He was a broken man.

Be careful what you ask for, you might just get it.

[Kip Powick]

1 hour ago, Rich Pulman said:

Back in 2008/09 I remember having breakfast with a former Delta pilot who spent his entire aviation career with that company. We were in Brussels at the Jet Airways crew hotel. He was 64 years old and was just undergoing his initial line training with us on the B777. He hadn't flown since being forced out of Delta at age 60. He was crying. He explained that Delta had just gone through bankruptcy and his pension had been reduced to ~$40,000/year. He was a broken man.

Be careful what you ask for, you might just get it.

Obviously I am not aware of all the circumstances of this fellow's life but if at age 60,  in 2004, this fellow couldn't manage on just Delta's $40,000.00, I would say he pretty much failed to PLAN his retirement  and was living from payday-to payday. Surely he would have had an investment plan as a safety net,  but then again, perhaps he was faced with alimony for a couple of sources....who knows?

Everybody approaches retirement with a different attitude but one should, at least, be wary of the volatility of any company pension plan and ensure they will always have another source of income, albeit less, should their company pension plan evaporate. 

[Rich Pulman]

Ummm, his pension in 2004 was in the high $100Ks. Post bankruptcy it was reduced to $40K. I doubt there are very many who have a retirement plan that deals with that kind of setback.

[Kip Powick]

1 hour ago, Rich Pulman said:

Ummm, his pension in 2004 was in the high $100Ks. Post bankruptcy it was reduced to $40K. I doubt there are very many who have a retirement plan that deals with that kind of setback.

Little more complicated than that. Delta pilots had the option of a lump sum payment which would reduce their actual  monthly pension  payments and leave a monthly pension cheque  the retiree felt was comfortable  and would still be able to invest that lump sum. 

A pilot with 37 years in could take about 1.2 million out and his pension would then be about $2500.00 a month, ($30,000.00/yr) . When Delta went into bankruptcy his pension almost went to zero but he still had 1.2 million "somewhere".

Perhaps the fellow in question did not take a lump sum and, yes, his pension would be cut by about 55-65% , Initially Delta stated that full term pilots would never see less than $75.000.00 annual pension but once the numbers were crunched that never happened, Based on the fact that that individual went to $40,000.00 would indicate that he did not take a lump sum and reduce his monthly income cheque and was, thus, a victim of the severe cuts to his total monthly pension cheques..

That "lump sum" upon retirement would be an interesting scenario, had it been available up here.

[Rich Pulman]

8 hours ago, Kip Powick said:

Little more complicated than that. Delta pilots had the option of a lump sum payment which would reduce their actual  monthly pension  payments and leave a monthly pension cheque  the retiree felt was comfortable  and would still be able to invest that lump sum. 

A pilot with 37 years in could take about 1.2 million out and his pension would then be about $2500.00 a month, ($30,000.00/yr) . When Delta went into bankruptcy his pension almost went to zero but he still had 1.2 million "somewhere".

Perhaps the fellow in question did not take a lump sum and, yes, his pension would be cut by about 55-65% , Initially Delta stated that full term pilots would never see less than $75.000.00 annual pension but once the numbers were crunched that never happened, Based on the fact that that individual went to $40,000.00 would indicate that he did not take a lump sum and reduce his monthly income cheque and was, thus, a victim of the severe cuts to his total monthly pension cheques..

That "lump sum" upon retirement would be an interesting scenario, had it been available up here.

Allllllrighty then. Let’s go down that road… Let’s assume he takes $1.2M lump sum plus $30,000/year at age 60. Let’s also assume he will live another 25 years (longer will reduce the annuity payments). Finally, let’s assume he invests the entire lump sum in an annuity which gets a 5% annual rate of return. Stuff these data into an annuity calculator and you get an income of ~$81,000/year.

So his choices become:

1) straight pension of ~$160,000/year and hope it lasts until he dies;

2) hedge his bets with a combination of reduced pension + annuity:  $30,000 + $81,000 = $111,000/year for 25years, then $30,000/year (if the pension is still solvent) until he dies;

3) Invest the lump sum at 5% and take the $60,000/year for the rest of his life plus the $30,000/year as long at it lasts for an initial income of $90,000/year, but fail safe income of $60,000/year;

4) take option 2, assume the pension will go bust, and plan his lifestyle around $81,000/year for 25 years, then have nothing;

5) Some combination of options 2 & 3 with an income somewhere in between.

Which choice do you think most people earning high $200Ks (or more) prior to retirement would make? Which choice would you make?

Edited December 8, 2022 by Rich Pulman

[st27]

I don’t have first hand knowledge but….I thought at the time when US airlines found themselves in bankruptcy, the pension funds were fair game, similar to Nortel up here. I believe Canadas rules are different in that the pension funds can’t be touched by the company.

So I wouldn’t be surprised if retirees were left with a fraction of their planned retirement incomes after the companies raided the pension plans.

https://www.pbgc.gov/wr/large/united/united-airlines-plan-restoration

[Kip Powick]

Rich,

Nice work and I would take the $80,000.00 because, through my, (our),  planning, at age 60, all the kids (3), are gone, I have absolutely no debt...not a cent, and my money manager is pretty good because my RIF has made an average of 12% since I started investing.

The biggest factor in my life is that I never really made  big $$$$ during 28 years in Mil and 15 years in the Airline Industry and we never did live on the high side... my kids, grandkids, as well as health and happiness are more important than a 6 figure pension.........and......that light at the end of the tunnel gets brighter every year

[Rich Pulman]

10 hours ago, Kip Powick said:

Rich,

Nice work and I would take the $80,000.00 because, through my, (our),  planning, at age 60, all the kids (3), are gone, I have absolutely no debt...not a cent, and my money manager is pretty good because my RIF has made an average of 12% since I started investing.

The biggest factor in my life is that I never really made  big $$$$ during 28 years in Mil and 15 years in the Airline Industry and we never did live on the high side... my kids, grandkids, as well as health and happiness are more important than a 6 figure pension.........and......that light at the end of the tunnel gets brighter every year

Understood. Everyone has their own risk tolerance and it should be understood well before retirement. Too many people take what their "professional money guy/gal" has to say at face value without understanding the underlying risks, and without understanding the genuine conflict of interest those professional money managers have with their clients. You've been fortunate with your returns, although it pains me to see you with a RRIF. RRSPs are a hugely misunderstood savings tool that really aren't in the best interest of the investor. I'm quite happy to be retired without a pension (other than my miniscule 12-year DND pension) and without a cent in an RRSP. My income is taxed at a much lower rate than either of those two options, and I have full control of how much I can use. But that's all a discussion for another day!

Edited December 8, 2022 by Rich Pulman

[Kip Powick]

Re the RRIF...couldn't agree more but when they came out, we all rushed to them as a tax shelter  ( mid 1970s) but alas, not so much but in the meantime we did find a great money manager so it worked out . At one point we were up 17% on some of his investments. As we aged he moved us from HIGH RISK to a lower risk factor...No regrets,

[Rich Pulman]

2 hours ago, Kip Powick said:

Re the RRIF...couldn't agree more but when they came out, we all rushed to them as a tax shelter  ( mid 1970s) but alas, not so much but in the meantime we did find a great money manager so it worked out . At one point we were up 17% on some of his investments. As we aged he moved us from HIGH RISK to a lower risk factor...No regrets,

That’s great to hear. I had to fire my money managers. I also rushed in to the RRSP world when I was younger, following the hype and not understanding the real tax consequences. Fortunately I was able to withdraw the entire amount while I was working in China and in a low tax bracket here in Canada. Phew! 

[Maverick]

This is a good calculator. Plug in whatever numbers you like. For withdrawals you just plug in -.

 

https://www.calculator.net/investment-calculator.html?ctype=endamount&ctargetamountv=180000&cstartingprinciplev=1000000&cyearsv=13&cinterestratev=5&ccompound=annually&ccontributeamountv=-1&cadditionat1=beginning&ciadditionat1=monthly&printit=0&x=79&y=15#

Edited December 9, 2022 by Maverick

[Kip Powick]

So in October of 2020 Delta cancelled my booked  flights and gave me a credit voucher for the  exact funds I paid for flight(s)  that  were cancelled .

Today, with the voucher, I rebooked the exact same flights and my vocher was applied, and I still ended up with a bill in excess of $300.00 CDN

Now I know how those pilots are getting that pay increase .......

[Malcolm]

Looks like Delta is dramatically cutting back pilot hiring. Why are they cutting back so much when United says they want to hire 2,400+ in 2024?

 

Delta Throttles Back on Pilot Hiring© Provided by The Wall Street Journal

Delta Air Lines plans to hire roughly half as many pilots next year as it did in 2023, the latest sign that a more than two-year-long pilot hiring spree is starting to slow.

Major carriers have been hiring pilots at a record clip as they raced to catch up with the rapid rebound in travel demand that followed the Covid-19 pandemic. They hired over 13,000 pilots last year and are on track to bring on nearly as many this year, according to FAPA.aero, a pilot career advisory firm.

Delta told pilots in a message this week that it plans to hire about 1,100 pilots next year. It hired more than twice that many in 2022 and again in 2023 through November, according to data from FAPA.

The company’s pilot hiring target for next year is still elevated from a typical year: “Remember that any other year, hiring 1,100 pilots would be considered an incredibly high number,” the company wrote in the memo viewed by The Wall Street Journal.

Carriers encouraged workers, including thousands of pilots, to retire early during the pandemic—then scrambled to replace them and restore prepandemic levels of flying as travelers surged back.

Delta said that its hiring projections represent a continued healthy and robust demand for pilots.

“What we anticipate for the coming year is a very strong, yet more normalized, growth pattern” after two years of exceptionally strong hiring, the airline said.

The hiring figure was earlier reported by Aero Crew News, a pilot news service.

Airlines including Delta say travel appetite is holding up. But the airline industry’s growth is starting to downshift after more than two years of rapid expansion. That could help ease carriers’ fierce competition for pilots and hasten the end of a shortage that left some planes grounded and some small cities without air service.

Other major airlines haven’t outlined specific hiring plans for next year, but some analysts have said the most acute phase of the pilot shortage appears to be winding down as carriers catch up on hiring.

“Higher pay rates are attracting newcomers to the profession, major airlines may be moderating their rates of hiring, and some corners of the market are experiencing an excess supply of aviators,” Deutsche Bank analysts wrote earlier this month.

Budget carrier Spirit Airlines has suspended new-hire pilot training, citing its plans to slow growth next year. Cargo airlines’ need for new pilots has also eased because of a slump in parcel volumes.

All of that is likely to ease the strain on regional airlines, which have borne the brunt of an industrywide pilot shortage as bigger carriers have raided their ranks.

Regional airlines, most of which fly on behalf of larger carriers, have said their pilots are now quickly lured away by the bigger salaries and career opportunities of the major airlines.

Some have said they don’t have enough captains to pair with first officers needed to operate flights. To cope, regional carriers have boosted pay and tried to lure experienced captains from rivals, with one offering $250,000 bonuses to help recruit cargo carrier pilots.

Write to Alison Sider at alison.sider@wsj.com