Delta to increase profit sharing for employees


Delta Air Lines is boosting profit sharing for employees, matching the rate the carrier’s pilots already get.

Atlanta-based Delta has been paying out 10 percent of its pre-tax profits to non-pilot employees.

Delta switched to the current profit sharing formula for most employees in 2016, which pays out less than it previously did if Delta’s profits grew. The airline disclosed the change in 2015 as it announced a pay raise of 14.5 percent.

But starting Oct. 1, Delta says it will use the same profit sharing plan for all employees that it has for pilots, similar to its previous system for all employees. It will make profit sharing payouts of 10 percent of up to $2.5 billion in profit, and 20 percent of profit above $2.5 billion.

The company has nearly 32,000 employees in metro Atlanta.

Some employees had raised concerns about the unequal profit sharing formula between pilots and other employees -- particularly as Delta’s profits declined slightly in 2016 compared with 2015, yielding a smaller profit sharing payout to employees in February 2017.

In a Wednesday internal memo, Delta CEO Ed Bastian wrote that the shift back to a single profit sharing plan is in response to feedback from employees.

“You’ve made it clear that this change didn’t align with our one-team culture and it didn’t feel like Delta -- and you are right,” Bastian wrote to employees.

He added that “the recent challenges with severe weather and natural disasters proved once again that Delta’s culture and the spirit of our people are no match for even the fiercest of storms.”

The change in profit sharing formula is expected to decrease earnings, all other things being equal, according to a note to investors from J.P. Morgan analyst Jamie Baker.


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