April 27, 2016

Pitts Carr and Alex Weatherby

Delta Enters Mediation with Pilots Union

On March 31, 2016, the Air Line Pilots Association International (ALPA) filed for mediation with the National Mediation Board. The ALPA represents the Delta Master Executive Council (MEC) and the request for mediation was filed jointly with Delta Air Lines. No agreements had been reached by the parties involved and pursuant to the Railway Labor Act, if no agreement had been reached by March 31, both parties were required to file for mediation. The timeline and negotiations will now be taken over by a federal mediator.

According to pilots for the company, Delta had a “remarkable post-bankruptcy recovery.” Despite the financial recovery of the company, pilot compensation “has yet to fully recover from bankruptcy era pay cuts and the loss of retirement benefits.” Moody awarded Delta an investment-grade credit rating because of the airline company’s current balance sheet and its potential for profitability.

Despite having filed for mediation, both sides continue to meet with one another. Delta and ALPA signed an agreement in March that was intended to set a pace for talks between the parties. Delta MEC chairman, Captain Malone, said in his letter to pilots, “We are prepared to meet our goal of delivering an agreement, one that you will strongly ratify, by this summer.”

Captain Malone also stated, “The market for pilots is rising, and delay will only cost Delta more. As we are saying to the investment community, ‘We are investment grade,’ and have earned an investment grade contract.”
Last summer, the pilots rejected a tentative agreement due to a reduction in profit-sharing payouts. The union offered Delta a counter offer in December which went nowhere. The counter offer would have led to an increase in pay of 39.7% by 2018.

The ALPA was founded in 1931 and is the largest airline pilot union in the world. The union represents more than 52,000 pilots across 31 United States and Canadian airlines. More information about ALPA can be found here and here.