Delta Giving Out Raises, Expects Bigger Bonuses – And That’s a Problem for Southwest and American

JonNYC leaked a Delta memo to employees that went out on Friday. Ground and flight attendant employees get a 4% raise. Employees who receive merit-based pay adjustments will have a 4% increase in the total compensation pool available to them. And bonuses are expected to be higher, too.

Just as importantly the airline communicates that it is investing in solving pain points in jobs, and employees are reminded that they’re empowered to address the most important issues at the airline (safety). It’s a well-written memo. (However, see update at bottom of post. Update 2: Memo has been confirmed as authentic by several Delta employees as well now by official sources.)

Sometimes Delta’s anti-union messaging is off, but it’s compensation and culture where they’re able to deliver the difference with other airlines and why their mostly non-union workforce works for both the company and employees.

Delta Delivers Higher Profit Sharing Than American

American Airlines pays out a lower percentage of profits in profit sharing, but they also make less money than Delta and have more employees — so the numerator is lower, and the denominator higher.

It’s worth noting that at United, of course, bonuses are designed not to be earned.

Delta Raise Puts Pressure on Southwest Negotiations

Southwest is offering flight attendants a 3% raise and looking for changes in how they schedule reserves. The Delta raise will put pressure on Southwest negotiations.

Southwest, for its part, still manages to fire poor performers and this is crucial to maintaining their work culture. Slackers, people with bad attitudes, who make work harder for and demoralizing to the rest of the workforce need to go for the benefit of the vast majority of employees.

Leadership Matters Even More Than Pay

Work isn’t just about pay, although pay is necessary. People need to feel like they’re on a mission that’s greater than themselves. And they need to like and respect their colleagues. That takes a clear vision from management and it requires a willingness to reward excellence and cull those who stand in the way of it.

As we enter Labor Day weekend, it’s important to remember that union shop or not management cannot abdicate its responsibility to select and retain the best talent while transitioning out employees who aren’t a good fit for the company — ensuring that everyone inside the business is able to respect the contributions of their colleagues. And management has to set a vision that inspires employees to be their best.

That may be easier to do in a non-union environment, but it’s also not impossible in a union one like at Southwest Airlines, provided that negotiations are approached from a perspective of giving each employee their due and not outsourcing management of the workforce to the unions themselves.

Update: There’s an obviously fake version of the above memo that’s circulating (9% raises etc) and that raises a question about the authenticity of the one that JonNYC shared and I passed along. I am investigating. Here’s the obvious fake:

Update 2: The original memo I posted is confirmed authentic.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Delta is doing something right . I feel like I am there most important customer every time I fly or call them!

  2. Southwest Airlines culture has changed! The employees are required to do more for the same amount of pay.
    Long standing employees are being fired for through loop holes. SWA is closing stations and eliminating some departments in some stations, forcing employees out to save money. If you are a top out employee your job is on the line. Anyone with more than five years in, you are a liability to that company. It’s all about the .

  3. This is the most succinct explanation for the newbies, millennials, and those who think they have all the answers re what’s going on in the U.S. air market.

    American under the failed USAir management folks can only point to their success by creating an angry work environment for the employees who are like the “canary in the coal mine” observing how Parker et al ‘stole defeat from the jaws of victory.’ This comes with the full knowledge of its Board who simply watch as Parker and his pals embrace their own economic security at the expense of employees.

    It’s a huge and irreversible fall from #1 to #3 of the legacies, given more employees, lower profits, and less compensation than Delta; attacking the loyalty of their domestic flyers with the worst interiors anywhere (“Oasis”)-seat size/comfort; bathrooms.

    Without the heart and soul of its founders and leaders up through Herb Kelleher, Southwest has lost it’s niche personality in parallel to the lost vigor and vision of management that worked so well with employees evidencing credibility and integrity.

    United is aptly summarized, as it does not go out of its way to share and build morale. After all these years, the mentality is still a split personality between United and Continental.

    Delta is a marvelous example of what little is left in competition between the US3. FAs and pilots are cordial, smiling, happy; obviously proud of their well managed company. Sharing the higher profits only made sense; such action did not require a Walter Reuther to demand (GM-1946) to open the books to prove why employees could not get a good raise.

    Frankly, I am delighted I just shifted my loyalty from American to Delta. Just this week between ORD-LGA in F, drinks upon boarding, a full lunch service, and a delightful crew.

    I learned a long time ago that it’s poor management, not unions, that destroy a company.

  4. @ James S – I have to agree with your comments. Just finished up flying some 28,000 miles and 12+ segments in the month of August. Some for work (LHR was the farthest) and some for vacation (ANC – was my favorite) and in a variety of cabins – D1, Comfort + and Main Cabin. On all of the flights and in all of the cabins, the mood on board as well as that of the employees felt positive and upbeat. The employees went out of there way to say hi and always had a smile. It’s sometimes those littlest things that have an out sized impact. That kind of employee engagement and positive atmosphere is readily interpreted by the passengers onboard and results in everybody having a better flight.

  5. As a former AWA, USAir and current AA FA, take me at my word that the morality right now is the worst I’ve EVER seen in my 32+ years in the industry. If things don’t change soon, I will not fulfill my goal of retiring with a 40 year service pin to my credit. I’m a pretty patient guy, but I’m not literate in incompetence.

  6. @Kevin A Eglseder Yikes! *morale

    unless you’re confirming the rumors are true! LOL

    “I’m not literate in incompetence”. What does this mean?

  7. Dear American Airlines:

    As a loyal Advantage and American customer since 1987, I am not pleased by cancelled American flights after the Labor Day weekend I argue is precipitated by retireing American’s 24 remaining MD Super 80’s.

    American should continue to fly the 24 MD Super 80’s till January 1, 2020 to eliminate inconviences to customers.

    American is unable to fulfill schedules from the grounded 737 MAX planes.

    The 24 remaining MD Super 80’s are reliable, comfortable, safe, and best of all “paid off”.

    These loyal MD 80’s are an asset especially now that the airline will lose millions from cancelled flights, and frustrated customers.

    American made a mistake by not spending $1 million
    to upgrade software on MD 80 flight simulators, and MD 80’s to be complaint.

    What a tragedy to not spend the $1 million dollars to keep the MD 80’s flying longer, and keep flight schedules on time without cancellations after Labor day holiday.

  8. Hi Colleen.

    One of the reasons my fellow long tenured employees and myself continue in this profession is simple. On any given day, we enjoy semi intelligent conversations with anyone at anytime. It helps occupy time during a long flight and we enjoy talking/conversing with our guests. Sadly, day after day, we’re asked to explain the current decisions AA executives have made, sometimes mind blowing and ridiculous decisions which make NO sense to us or our guests. So when I say I’m not fluent in incompetence, this is my, maybe, our, mindset. For someone to be employed in this industry in this position for this length of time is a testament to our ability to “ go with the flow.” When the flow turns against us because of incompetence, it really tests our resolve as the trained professionals we are.

    35 year FA’s being kicked to the curb by being on reserve three times a month ( for the first time EVER ) while the six month employees enjoy a set schedule, is maddening and a HUGE pay-cut for us senior folks. Exposing us to a toxic new uniform and expecting us to just deal with it is insulting. Seeing the larger payouts from smaller airlines is infuriating. Add to that a new BS sick policy ( which is being contested in a NY state court ) is downright disrespectful and demoralizing.

    Even with all the above, once we board the aircraft and perform our job functions, we still love it. When the incompetence stops and AA starts working WITH us, we hope to reengage our love with the industry.

    To be clear, I am NOT a disgruntled employee. Just saddened by how far AA has fallen all for a few extra bucks for the shareholders, of which I am one

  9. Kevin,

    Thanks for your perspective. I am a 31 year Delta Employee. I appreciate your honestly.

    Wish you the best

    Earl Blackshre

  10. Delta may be “doing something right” but for the life of me I don’t know what…my flt. On them was a disaster from the very start. I can over look the slow unprofessional service but when I ring a call bell I expect it to be answered on a 2 1/2 hr. flt. Sooner the 25 minutes. No at all impressed with the crew on the flt.

  11. How is it obviously fake when it was shown two weeks before the real one? Either the person making the fake one knew we were getting a raise beforehand or they changed the amount they wanted to give.

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