Delta Air Lines is increasing base pay for all ground crew and flight attendants by 14.5 percent, a move that will lift compensation for more than 6,000 of its Twin Cities employees.
The company on Wednesday announced the raise, which stands out both for its size and for appearing to be a break in the wage stagnation that persisted in the U.S. economy amid other improvements.
It comes at a time when Delta, which is the dominant carrier at Minneapolis-St. Paul International Airport and has 9,700 local workers, has been experiencing both record profits and labor challenges.
The change will affect nearly 1,800 flight attendants in Minnesota and more than 3,100 ground crew workers at MSP. It also affects more than 1,000 merit employees — a category of worker that includes miscellaneous positions such as in-flight services, reservation sales and customer care, technical operations and human resources.
Delta Chief Executive Richard Anderson and President Ed Bastian announced the decision in a memo to employees. In addition to the pay raise, the Atlanta-based carrier will increase its 401(k) contribution match from 5 percent to 6 percent beginning Jan. 1. And Delta’s profit-sharing will be based on a new, sliding formula.
Under the current plan, employees share a 10 percent slice of profits, and 20 percent if the company exceeds $2.5 billion. The new plan will raise the 20 percent threshold to whatever dollar amount beats the prior year’s pretax profitability. This model favors the company on high-profit years and favors the employees on low-profit years when the $2.5 billion trigger is not met.
Last year, Delta earned $4.5 billion in pretax profit and paid $1.1 billion in profit-sharing.
The carrier said the changes are in response to its employees wanting more predictability and stability in their paycheck.
“Profit-sharing will remain a permanent part of your total compensation, but you have made it clear that you want more in your monthly paychecks,” Anderson and Bastian said in the memo.
Earlier this year, the International Association of Machinists and Aerospace Workers (IAM) tried to unionize Delta’s flight attendants. The effort was set back by problems with sign-up cards that were a precursor to a vote.
This summer, Delta reached an agreement with its pilots union in June for a new compensation package that included a similar model of higher base wages and more fluid profit-sharing bonuses. Members of the union voted to reject the package, with some arguing it did not match the company’s improved profitability.