Amid a protracted labor dispute over a new contract, nearly 15,000 Delta Air Lines (NYSE: DAL) pilots have voted to authorize a strike.
The airline’s unionized pilot group, which is part of the Air Line Pilots Association (ALPA), said that 96 percent of the pilot group participated in the vote, and that 99 percent voted in favor of strike authorization. According to the group, it was the first such vote in 16 years, emerging after negotiations for a more lucrative contract stalled.
The Strike Authorization Ballot is closed. With a 96% participation rate & 99% of pilots voting in favor to strike, the #DeltaPilots have made a powerful statement to @Delta that we’re willing to strike to secure the contract we have earned. https://t.co/wf3FVKKMOT— Delta Air Lines Pilots (@Delta_Pilots) October 31, 2022
Throughout this year, Delta’s pilots have picketed across the country to demand better working conditions and benefits.
“The results send an undeniable message to management,” Capt. Jason Ambrosi, chair of the Delta master executive council (MEC) of ALPA, said in a statement. “We are ready to go the distance up to and including exercising our rights to self-help under the Railway Labor Act (RLA) to secure a contract that reflects the value we bring to Delta Air Lines.”
The MEC coordinates union-related matters among the pilot group in an airline.
Airline pilots are prohibited from easily going on strike, according to the Railway Labor Act, which governs relations between unionized pilot groups and management. The law requires both parties to do everything in their power to resolve labor issues before workers can strike.
“A strike is not an action we take lightly and one we hope to avoid, if possible,” Ambrosi said in his statement. “However, we will no longer accept further delays or excuses from management: we are willing and ready to strike.”
Amid the escalation, it would be some time before the pilots could fully strike. They would still have to go through the federal National Mediation Board, the third party whose duty is to help maintain the flow of interstate commerce in the airline and railway industries through representation, mediation, and arbitration services.
According to ALPA, the mediation board must first decide that additional mediation efforts would not be productive and offer the parties an opportunity to arbitrate the contract dispute. If either party declined, ALPA said both parties would enter a 30-day “cooling off” period, after which pilots and management can engage in self-help—a strike by the union or a lockout by management.
Pilots Question Share Buybacks, Startup Investments
According to Ambrosi’s letter, one sour point for pilots is how Delta has allocated its earnings.
“Delta has money to spend, reported a record windfall of revenue for the third quarter, and has predicted a strong financial outlook,” Ambrosi said. “Further, in addition to wasting billions of dollars on pre-pandemic stock buybacks, Delta continues to invest billions in joint ventures and millions in wholly-owned subsidiaries.”
Delta’s management hasn’t commented publicly on this latest ordeal. However, during the company’s third-quarter earnings call in October—where the airline reported $695 million of quarterly profit on a record $14 billion revenue—Delta’s CEO Ed Bastian, when asked whether he was concerned about the pushback from labor groups around share repurchasing, said the airline was more concerned about reducing its debt.
“Our sole priority at Delta is to make sure that any excess cash that we’re generating is used to pay down debt,” Bastian said. “We acquired a meaningful amount of debt during the pandemic. And we want to get our investment-grade rating back.”
That same week, before the earnings call, Delta said it would invest up to $200 million in the eVTOL startup as part of a multi-year, multi-market commercial and operational partnership. Of the $200 million lump sum, it made a $60 million upfront equity investment in Joby—roughly 2 percent of the company.
Clearly, those two updates have garnered the ire of the pilot group, now frustrated about its old contract.
“Remember, as our negotiations drag on, we last received a pay raise in January 2019, and we continue to labor under a contract signed in 2016,” Ambrosi said.
However, with the overwhelming vote, things could turn quickly. “The message we have sent to Delta management is unquestionable: we will strike if necessary.”