MINNEAPOLIS - Pilots at Delta Air Lines approved a new contract on Friday that will prompt a major shift in the way Delta uses smaller jets.
The deal is likely to become a benchmark for pilot talks at United Airlines, too, and will ripple through negotiations at other airlines. And because unhappy pilots can make it tougher to run an airline, Delta will benefit from having a settled contract that runs through the end of 2015.
The new contract will allow Delta to accelerate a shift toward bigger jets and away from smaller, money-losing 50-seat regional jets that connect passengers in smaller cities to Delta hubs. The shifts won't happen overnight, but rather over the next few years. In some cases Delta is expected to need to renegotiate airplane leases and agreements with the feeder airlines that it hires to fly under the Delta Connection name.
The new deal lets Delta get rid of 50-seat regional jets more quickly, while at the same time flying more 76-seat jets. Fifty-seaters have become money-losers due to higher fuel prices. Passengers generally prefer bigger jets, and Delta has long said it wants to reduce its use of 50-seat planes.
Meanwhile, pilots at major airlines try to limit the use of small jets because they don't like to see their airline's flying done on small planes flown at lower pay by pilots at feeder airlines. That's why the use of regional jets is one of the biggest issues airlines and pilots tussle over. It's a key sticking point in United Continental Holdings Inc.'s talks this week seeking a single contract to cover pilots who came from both United and Continental.
Negotiations between airlines and pilots are often difficult. But Delta and pilots struck a deal well in advance of the end of this year, when their previous contract had been due for changes.
— Caps the number of 50-seat jets at 125, down from 343 now, according to the union. The union estimated that getting rid of 50-seaters faster would save Delta $473 million in maintenance and ownership costs on those planes, according to numbers the union said the company provided during negotiations.
— Allows 70 more jets with 70 or 76 seats.
— Allows Delta to lease 88 former AirTran Boeing 717s from Southwest Airlines Co. Those planes seat 117 and will be flown by Delta pilots. Delta said it expects to finalize the lease agreement soon. The union said those jets will begin arriving late next year.
The union estimated that the number of seats flown by regional carriers for Delta will drop 15.6 per cent. The end result of the changes "will be a massive shift of flying" to Delta itself instead of regional carriers, the union wrote in a June 21 explanation to members.
Delta pilots will get raises of almost 13 per cent at the beginning of next year, followed by 3 per cent raises at the beginning of 2014 and 2015. The deal takes effect Sunday.
Delta has 10,170 pilots. The union said 62 per cent of those who voted were in favour.
The airline issued a statement saying it was pleased that pilots approved the new contract. It "provides career growth opportunities and pay, scheduling and benefits improvements to pilots, while providing Delta with the ability to accelerate fleet enhancements which will be better for Delta customers and Delta people," the company said.
Shares of Atlanta-based Delta Air Lines Inc. fell 21 cents, or almost 2 per cent, to $10.95 on Friday.