Dec 5 (Reuters) - Delta Air Lines has offered a
34% cumulative pay increase to its pilots over three years in a
new contract, in a deal widely expected to become a benchmark
for negotiations at rivals United Airlines and American
But the proposed Delta contract is unlikely to set a global
precedent of inflation-beating pay rises for pilots, analysts
say, because of factors unique to the U.S. market.
FASTER TRAVEL RECOVERY
The U.S. domestic aviation market has rebounded to
pre-pandemic levels far more quickly than markets in other parts
of the world, according to data from airline industry group
U.S. domestic demand was only 0.8% below than 2019 levels in
October, while globally, domestic travel demand was 22.1% lower.
In September, U.S. domestic demand was 0.8% higher than in 2019.
For international travel, North American demand in October
was 10% lower than in 2019, compared with a 17.6% decline in
Europe and a 56.6% fall in the Asia-Pacific region at a time
when China, once the world's biggest outbound travel market,
remains effectively closed.
The U.S. rebound is a major turnaround from 2020 when
thousands of pilots, including 1,800 at Delta, retired early at
the encouragement of airlines after COVID-19 led to a plunge in
REGIONAL PILOT SHORTAGE
The steep pay rise on offer to Delta pilots follows a series
of large increases at U.S. regional airlines that serve as
feeders to major carriers.
Uniquely among world markets, the United States requires
pilots even at regional airlines to have a minimum of 1,500
hours of flying experience. The rule was put in place after a
deadly Colgan Air crash in 2009.
In other parts of the world, major carriers like Lufthansa
and easyJet offer training programmes that do
not require any prior experience and allow joiners to fly as a
co-pilot upon completion.
In the United States, gaining a commercial pilot license can
cost more than $70,000, to be followed by the need to build up
1,500 hours working in a relatively low-paid job like being a
flight school instructor before joining even a regional airline.
The U.S. Federal Aviation Administration in September
denied a request by regional airline Republic Airways to halve
the minimum requirement to 750 hours.
Faced with growing shortages of entry-level pilots and rapid
attrition of more experienced ones to major airlines, U.S.
regional carriers have lifted pay rapidly.
For example, Piedmont Airlines said in June it would nearly
double first-year pay to captains and first officers to $146 an
hour and $90 an hour respectively.
The increases put pressure on major airlines to ensure their
entry-level pay attracts joiners from regional carriers to cover
retirements and planned fleet growth.
OUTSIDE THE UNITED STATES
North America is the only region that has a pilot shortage
at present, equivalent to about 11% of supply, or 8,000 pilots,
consulting firm Oliver Wyman said in July.
Europe and Asia have pilot surpluses that are expected to
remain until the middle and end of the decade respectively, it
The pay rises being achieved by pilots outside the United
States reflect the different supply situation and are often in
line with the percentage gains on offer to all airline employees
as the business recovers from the pandemic and inflation rises.
In Australia, pilots at Qantas Airways' low-cost
arm Jetstar last month agreed to a two-year pay freeze followed
by 3% annual increases and a one-off bonus of about A$10,000
($6,843.00), the same offered to other workers.
Hong Kong's Cathay Pacific Airways said it would
increase base pay by an average of 3.3% in 2023 and offer
bonuses worth the equivalent of one month's salary to Hong
Kong-based staff meeting performance targets.
Air France in September raised salaries for all
staff by 5% in anticipation of wage talks due next year, and
offered a 1,000 euro ($1,057.50) bonus payment to its workforce.
($1 = 1.4613 Australian dollars)
($1 = 0.9456 euros)
(Reporting by Jamie Freed in Sydney; Editing by Robert Birsel)