Delta Air Lines Inc., the least unionized major carrier, told flight attendants, reservation agents and administrative workers they won't receive raises this year because they're already paid at top industry rates.
Delta, the third-largest airline and operator of a hub at Salt Lake City International Airport, told the workers in a memo Wednesday that it had completed an annual pay review and that wages are the highest or second-highest in the industry. The same group of workers, 40,000 of the airline's 60,000 employees, didn't get pay raises last year.
Atlanta-based Delta will post losses this year and next, according to estimates in a Thomson Financial survey of analysts. The company had $3.26 billion in losses in the past three years and has laid off workers, reduced benefits and changed work rules to cut costs amid increased competition and lower demand.
"The industry is in no way in a recovered state so it's unrealistic to think there would be increases," said Robert Mann, a labor consultant to airlines, unions and in court cases through his firm RW Mann & Co. Inc. in Port Washington, New York.
Delta shares rose 38 cents, or 4.7 percent, to close at $8.47 Friday on the New York Stock Exchange. The shares have declined 28 percent this year.
Delta's pilots, who rejected the airline's request for a 30 percent pay cut, are the only major unionized work group. Chief executive officer Gerald Grinstein has said that Delta's recovery depends on concessions from the pilots, whose union has offered to take a 9 percent pay cut and forgo a 4.5 percent increase next month. The two sides are in negotiations.
The Wall Street Journal reported Friday that some Delta pilots are pressuring their union to unilaterally decline the pending 4.5 percent increase, but the union is resisting the move.
One group of pilots has begun urging members to write to their union leaders and urge them to move closer to Delta management's proposed 30 percent pay-cut request, the Wall Street Journal said. In an e-mail message to fellow pilots recently, one pilot wrote, "Gentlemen and ladies, it is time that you write your reps and tell them to get moving on something or we will pay a very heavy price later."
Delta is seeking to reduce costs to be competitive with discount rivals such as JetBlue Airways Corp. and major airlines that have lowered costs through bankruptcy filings or major financial restructurings.
For workers, "the grass is still greener at Delta," said Mann, pointing to the 30 percent pay cuts that some airline workers have been forced to take.
Delta "has no plans for pay cuts for non-contract employees, barring any unforeseen circumstances," Robert Colman, Delta's executive vice president of human resources, said in the memo.
Delta's decision not to raise the pay levels this year was reported Friday by the Atlanta Journal-Constitution. Bloomberg News obtained a copy of the memo.